TIDMSAFE
RNS Number : 5546Q
Safestore Holdings plc
21 February 2023
21 February 2023
Safestore Holdings plc
("Safestore", "the Company" or "the Group")
First quarter trading update for the period 1 November 2022 to
31 January 2023
Solid start to the 2023 financial year
Group Operating Performance Q1 2023 Q1 2022(2) Change Change-
CER(1)
----------------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 55.7 50.9 9.4% 8.4%
Closing Occupancy (let sq ft-
million)(3) 6.095 5.708 6.8% n/a
Closing Occupancy (% of MLA) 77.6% 80.8% -3.2ppts n/a
Maximum Lettable Area (MLA -million)(4) 7.850 7.070 11.0% n/a
Average Storage Rate (GBP) 30.42 29.55 2.9% 2.0%
Group Operating Performance- Q1 2023 Q1 2022(2) Change Change-
like-for-like(3) CER(1)
--------------------------------- -------- ----------- --------- --------
Revenue (GBP'm) 52.6 50.5 4.2% 3.4%
Closing Occupancy (let sq ft-
million)(4) 5.545 5.687 -2.5% n/a
Closing Occupancy (% of MLA)(5) 79.1% 81.5% -2.4ppts n/a
Average Occupancy (let sq ft-
million) 5.574 5.710 -2.4% n/a
Average Storage Rate (GBP) 31.60 29.58 6.8% 6.0%
Highlights
-- Group revenue for the quarter in CER(1) up 8.4% and 9.4% at actual exchange rates
-- Like-for-like(5) Group revenue for the quarter in CER(1) up 3.4%
o UK up 3.5%
o Paris up 2.6%
o Spain up 7.1%
-- Like-for-like(5) average rate for the quarter up 6.0% in CER(1)
o UK up 7.2%
o Paris up 1.0%
o Spain up 8.5%
-- Like-for-like(5) occupancy at 79.1% (2022: 81.5%)
o UK down 3.3ppts at 78.7% (2022: 82.0%)
o Paris up 1.5ppts at 80.7% (2022 79.2%)
o Spain down 4.9ppts at 80.8% (2022: 85.7%)
-- As previously reported, Revolving Credit Facilities (RCF's)
refinanced with a new increased GBP400m unsecured multi-currency
four-year facility (with two one-year extension options) in
November 2022. Margins remain at 1.25% in line with previous RCF's
and all facilities, including private placement notes, are now
unsecured.
-- Group Property Pipeline of 1.5m sq ft representing c. 19% of the existing portfolio.
-- Two new sites secured in Ellesmere Port in the UK and in
Central Barcelona adding 69,700 sq ft of MLA.
-- Edinburgh leasehold re-geared and freehold of Valencia store acquired in Barcelona.
-- Acquisition of 58,000 sq ft existing storage facility in Apeldoorn in the Netherlands.
-- Entry into German market via a new Joint Venture ("JV") with
Carlyle which has acquired the seven-store myStorage business with
326,000 sq ft of MLA(4) .
Frederic Vecchioli, Chief Executive Officer, commented:
"I am pleased to report that the solid early trading indicated
in our January 2023 announcement has continued through to the end
of our first quarter with the Group delivering like-for-like
revenue growth of 4.2% and total revenue growth of 9.4% (3.4% and
8.4% respectively on a CER basis).
We have opened two new stores in the period in Spain, acquired
an existing operation in the Netherlands and added two stores in
the UK and Spain to our pipeline which, at 1.5m sq ft, now
represents 19% of our existing portfolio's MLA. We anticipate the
pipeline will continue to grow over the coming months. Our strong
and flexible, recently refinanced balance sheet has significant
funding capacity, allowing us to continue to consider and execute
strategic, value-accretive investments as and when they arise.
Alongside our attractive development pipeline, we continue to
prioritise the significant upside from filling our 1.8m square feet
of fully invested, currently unlet space. The business has
demonstrated its inherent resilience in recent times and we look to
the future with confidence. The first quarter's trading performance
has provided us with a solid base for the rest of the financial
year and we anticipate that the business delivers Adjusted Diluted
EPRA Earnings per Share(7) for 2022/23 in line with the consensus
of analysts' forecasts(8) ".
Business Highlights
UK Trading Performance
UK Operating Performance Q1 2023 Q1 2022(2) Change
----------------------------------------- -------- ----------- ---------
Revenue (GBP'm) 41.6 39.9 4.3%
Closing Occupancy (let sq ft-
million)(3) 4.410 4.536 -2.8%
Closing Occupancy (% of MLA) 78.4% 81.1% -2.7ppts
Maximum Lettable Area (MLA- million)(4) 5.620 5.600 0.4%
Average Storage Rate (GBP) 30.45 28.41 7.2%
UK Operating Performance- like-for-like(3) Q1 2023 Q1 2022(2) Change
-------------------------------------------- -------- ----------- ---------
Revenue (GBP'm) 40.9 39.5 3.5%
Closing Occupancy (let sq ft-
million)(4) 4.358 4.515 -3.5%
Closing Occupancy (% of MLA)(5) 78.7% 82.0% -3.3ppts
Average Occupancy (let sq ft-
million) 4.384 4.538 -3.4%
Average Storage Rate (GBP) 30.48 28.43 7.2%
The UK performed solidly in the first quarter with total revenue
up 4.3% and like-for-like revenue up 3.5%, driven by a continued
strong average storage rate increase of 7.2%, offset by a reduction
in average occupancy of 3.4%, where we have seen a return to a more
normal cycle of trading in the current financial year. In the first
quarter, as anticipated, we have seen an occupancy outflow as is
typical for the period (which is our low season). The average
storage rate grew sequentially by 2.9% compared to the fourth
quarter of 2022.
As ever, the Group looks to find an appropriate balance of rate
growth and occupancy performance in order to maximise revenue.
Enquiry levels for the first quarter, whilst slightly behind the
same period in 2022, remained significantly ahead of the
pre-pandemic period.
Paris Trading Performance
Paris Operating Performance- Q1 2023 Q1 2022(2) Change
Total and like-for-like(3)
----------------------------------------- -------- ----------- ---------
Revenue (EUR'm) 12.47 12.15 2.6%
Closing Occupancy (let sq ft-
million)(3) 1.099 1.079 1.9%
Closing Occupancy (% of MLA) 80.7% 79.2% +1.5ppts
Average Occupancy (let sq ft-
million) 1.102 1.080 2.0%
Maximum Lettable Area (MLA- million)(4) 1.360 1.360 -
Average Storage Rate (EUR) 41.26 40.84 1.0%
Revenue (GBP'm) 10.9 10.3 5.8%
Our Paris business had a solid quarter growing total revenue by
2.6% year-on-year.
Like-for-like occupancy performance was robust for the quarter
with closing occupancy at 80.7%, up 1.5ppts compared to Q1 2022. As
we return to a more normal cycle of trading in the current
financial year, we have seen a modest occupancy outflow in the
period as expected and which is typical for the first quarter (our
low season).
The like-for-like average rate was up by 1.0%, and together with
the increase in like-for-like occupancy, drove the like-for-like
revenue growth of 2.6%.
The average storage rate grew sequentially by 0.8% compared to
the fourth quarter of 2022.
Sterling equivalent like-for-like revenue was impacted by the
3.3% weakening in the Sterling: Euro exchange rate for the quarter
compared to Q1 2022. As a result, sterling equivalent total and
like-for-like revenue grew by 5.8% compared to Q1 2022.
Enquiry levels for the first quarter were slightly ahead of the
same period in 2022 and significantly ahead of the pre-pandemic
period.
Spain Trading Performance(6)
Spain Operating Performance Q1 2023 Q1 2022(2) Change
----------------------------------------- -------- ----------- ----------
Revenue (EUR'm) 0.95 0.85 11.8%
Closing Occupancy (let sq ft-
million)(3) 0.096 0.093 3.2%
Closing Occupancy (% of MLA) 46.4% 85.7% -39.3ppts
Maximum Lettable Area (MLA- million)(4) 0.210 0.110 90.9%
Average Storage Rate (EUR) 35.48 33.47 6.0%
Revenue (GBP'm) 0.8 0.7 14.3%
Spain Operating Performance- Q1 2023 Q1 2022(2) Change
like-for-like(3)
--------------------------------- -------- ----------- ---------
Revenue (EUR'm) 0.91 0.85 7.1%
Closing Occupancy (let sq ft-
million)(4) 0.088 0.093 -5.4%
Closing Occupancy (% of MLA)(5) 80.8% 85.7% -4.9%ppt
Average Occupancy (let sq ft-
million) 0.088 0.092 -4.3%
Average Storage Rate (EUR) 36.30 33.47 8.5%
Revenue (GBP'm) 0.8 0.7 14.3%
In the quarter, our Spanish business saw a strong 11.8% and 7.1%
growth in total and like-for-like revenue respectively.
The like-for-like average storage rate grew by 8.5% to EUR36.30
compared to EUR33.47 for Q1 2022. This rate grew sequentially by
3.7% compared to the fourth quarter of 2022. This increase in the
like-for-like average rate, offset by a reduction in like-for-like
average occupancy of 4.3%, drove the like-for-like revenue growth
of 7.1%.
The reduction in total occupancy to 46.4% reflects the dilutive
effect of the three recent store openings.
Sterling equivalent like-for-like revenue was impacted by the
3.3% weakening in the Sterling: Euro exchange rate for the quarter
compared to Q1 2022. As a result, sterling equivalent total and
like-for-like revenue grew by 14.3% compared to Q1 2022.
Following the acquisition of four stores in Barcelona just over
three years ago, the business has already opened three new sites
and has added a pipeline of seven stores across Barcelona and
Madrid and we look with confidence to the continued expansion of
the portfolio.
Benelux Trading Performance
Our Netherlands and Belgium businesses, acquired on 30 March
2022, contributed EUR2.7m revenue in the period.
The Benelux businesses grew revenue by 2.2% (excluding the newly
acquired Apeldoorn site as set out below) compared to the fourth
quarter of 2022 and the businesses ended the period with a combined
closing occupancy of 74.2%.
The business was originally established in 2019 with the
acquisition of six stores and was subsequently developed into a
16-store portfolio with a pipeline of five additional stores.
Refinancing
In November 2022, the Group completed the refinancing of its
revolving credit facilities (RCFs) which were due to expire in June
2023.
The previous GBP250m sterling and EUR70m euro secured RCFs have
been replaced with a single multi-currency unsecured GBP400m
facility. In addition, a further GBP100m uncommitted accordion
facility is incorporated into the facility agreement.
The facility is for a four-year term with two one-year extension
options exercisable after the first and second years of the
agreement.
Further detail is included in our Results Announcement of 17
January 2023.
Property Pipeline Developments
Openings in the period
Northern and Southern Madrid
In March 2021 and April 2021, the Group exchanged contracts on
two freehold buildings in Southern Madrid and Northern Madrid,
respectively. Both existing buildings have been converted into
32,000 and 53,000 sq ft MLA self storage facilities and were opened
in November 2022.
New Development Sites
Ellesmere Port- UK
In Ellesmere Port in Northwest England we have secured a new
freehold development site, located in an accessible position near
junction 8 of the M53 on the affluent Wirral Peninsular. A 55,000
sq ft MLA new build store should open in late 2023.
Spain
A new leasehold site in Central Barcelona (Central Barcelona 3)
has been acquired. The existing building will be converted into a
14,700 sq ft MLA store and is expected to open in 2023. The
building has planning permission and the lease is 30 years in
length.
Pipeline Summary
We are leveraging our effective and scalable operating platform
to increase our expansion plans across both the UK and continental
Europe. This approach has resulted in the largest development
pipeline in our history. This pipeline of c. 1.5m sq ft represents
c. 19% of our existing property portfolio.
In the first quarter of the 2023 financial year, c. GBP25m has
been spent on the new store openings, the Valencia freehold
acquisition, the acquisition of the Apeldoorn site in the
Netherlands and the pipeline stores.
Opening 2023 FH/LH Status* MLA Other
-------------------------- ------ -------- ------- ----------------------
Redevelopments and Extensions
-----------------------------------------------------------------------------
London- Crayford LH C, UC 9,400 Extension
Paris- Pyrenees LH C, UC 22,200 Extension
New Developments
-----------------------------------------------------------------------------
London- Morden FH C, UC 52,000 New build
Wigan FH C, UC 42,700 Conversion
Ellesmere Port FH C, UC 55,000 New build
Paris- South Paris FH C, PG 55,000 New build
Paris- West 1 FH CE, STP 56,000 New build
Paris- West 3 FH CE, STP 58,000 New Build
Paris- East 1 FH CE, STP 60,000 Conversion
Paris- North West 1 FH CE, STP 54,000 Conversion
Eastern Madrid FH C, PG 50,000 Conversion
Northern Barcelona FH C, PG 42,000 Conversion
South Barcelona FH C, PG 30,600 Conversion
Central Barcelona 3 LH C, UC 14,700 Conversion
Amersfoort- Netherlands FH C, UC 58,000 New build
Almere- Netherlands FH C, STP 44,500 Conversion
Opening 2024
-------------------------- ------ -------- ------- ----------------------
Redevelopments and Extensions
-----------------------------------------------------------------------------
New Developments
-----------------------------------------------------------------------------
London- Paddington FH C, PG 13,000 Conversion, Satellite
Park West
London- Lea Bridge FH C, PG 76,500 New build
London- Romford FH C, STP 41,000 New build
Shoreham FH CE, STP 54,000 New build
South West Madrid FH CE, STP 46,800 Conversion
Southern Madrid 2 FH CE, STP 68,800 Conversion
Central Barcelona 2 LH CE, STP 24,700 Conversion
Amsterdam- Netherlands FH CE, STP 61,400 New build
Aalsmeer- Netherlands FH CE, STP 48,400 New build
Rotterdam- Netherlands FH C, UC 71,000 New build
Opening 2025
-----------------------------------------------------------------------------
New Developments
-----------------------------------------------------------------------------
London- Woodford FH C, PG 76,000 New build
London- Walton FH C, STP 20,700 Conversion
Paris- La Défense FH C, PG 44,000 Mixed use facility
Opening Beyond 2025
-----------------------------------------------------------------------------
New Developments
-----------------------------------------------------------------------------
London- Old Kent Road FH C, STP 76,500 New build
London- Bermondsey FH C, STP 50,000 New build
Total Pipeline MLA (let sq ft- million) c. 1.477
-------------------------------------------- -------------------------------
Total Outstanding CAPEX (GBP'm) c. 141.0
-------------------------------------------- -------------------------------
*C = completed, CE = contracts exchanged, STP = subject to
planning, PG = planning granted, UC = under construction
Lease Extension
During the period we have completed the extension of our lease
at Edinburgh Fort Kinnaird store. The lease has been extended by a
further 10 years to 2040.
Freehold Purchase
In Barcelona, the Group has been leasing its Valencia store
since 2013. During the period, the freehold of the site was
acquired for EUR3.6m.
Acquisition of Apeldoorn Self-Storage Facility in the
Netherlands
During the period, the Group completed the acquisition of an
existing 58,000 sq ft self storage facility in Apeldoorn in the
Netherlands. The store was operating under the Stoor brand and is
situated in an easily accessible commercial and logistics district
on the north side of the city, which has a population of
165,000.
New Joint Venture with Carlyle and Investment in myStorage in
Germany
As announced in December 2022, Safestore has entered the German
self storage market via a new Joint Venture with Carlyle, which has
acquired the myStorage business.
Safestore has developed a multi-country highly scalable platform
with leading marketing and operational expertise in self storage,
with a proven track record for developing its platform in new
markets.
The acquisition of myStorage represented an excellent
opportunity to develop our platform into the attractive German self
storage market. The Joint Venture builds upon our previous
successful relationship with Carlyle having entered the Benelux
market in 2019. Our common intention is to target development and
acquisition opportunities through the Joint Venture, providing the
opportunity to achieve operational scale and to develop local
market knowledge, whilst also retaining the option for Safestore to
develop its own wholly owned self storage sites in Germany. We look
forward to continuing our working relationship with Carlyle, and to
developing a long and mutually beneficial relationship.
The German market is one of Europe's more under-penetrated
markets with just 0.09 sq ft of storage space per capita which
compares to 0.76 sq ft in the UK, 0.24 sq ft in France, 0.24 sq ft
in Spain, 0.60 sq ft in the Netherlands and 0.20 sq ft in Belgium.
According to the 2022 FEDESSA report, there are just 320 facilities
in Germany and 7.6m sq ft of lettable space.
myStorage has seven medium to long-term leasehold stores and
326,000 sq ft of MLA in Berlin, Heidelburg, Mannheim, Fürth,
Nuremburg, Neu-Ulm, and Reutlingen.
On acquisition, the occupancy of the portfolio was 67% with two
of the stores having opened in 2021.
Safestore's initial investment in the Joint Venture was a c.
EUR2.2 million equity investment for a 10% share of the Joint
Venture. Safestore will also earn a fee for providing management
services to the Joint Venture. The Group expects to earn an initial
return on investment of c. 15% for the first full year before
transaction-related costs reflecting its share of expected joint
venture profits and fees for management services.
Ends
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 - Q1 2022 is the quarter ended 31 January 2022.
3 - Occupancy excludes offices but includes bulk tenancy. As of
31 January 2023, closing occupancy includes 24,000 sq ft of bulk
tenancy (31 January 2022: 14,000 sq ft).
4 - MLA is Maximum Lettable Area.
5 - 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.
6 - The Spain business was acquired on 30 December 2019 with the
four originally acquired stores now considered like-for-like.
7- Adjusted Diluted EPRA EPS is based on the European Public
Real Estate Association's definition of Earnings and is defined as
profit or loss for the period after tax but excluding corporate
transaction costs, change in fair value of derivatives, gain/loss
on investment properties and the associated tax impacts. The
Company then makes further adjustments for the impact of
exceptional items, IFRS 2 share-based payment charges, exceptional
tax items and deferred tax charges. This adjusted earnings is
divided by the diluted number of shares. The IFRS 2 cost is
excluded as it is written back to distributable reserves and is a
non-cash item (with the exception of the associated National
Insurance element). Therefore, neither the Company's ability to
distribute nor pay dividends are impacted (with the exception of
the associated National Insurance element). The financial
statements will disclose earnings on a statutory, EPRA and Adjusted
Diluted EPRA basis and will provide a full reconciliation of the
differences in the financial year in which any LTIP awards may
vest.
8 - The analyst consensus for Adjusted Diluted EPRA EPS for the
current financial year, based on the forecasts of thirteen
analysts, is 49.5p. The thirteen analyst forecasts range from 45.3p
to 54.0p
This announcement contains inside information.
Enquiries
Safestore Holdings PLC
Frederic Vecchioli, Chief Executive via Instinctif Partners
Officer
Andy Jones, Chief Financial
Officer
www.safestore.com
Instinctif Partners
Guy Scarborough/ Bryn Woodward 07917 178920 / 07739 342009
Notes to Editors
-- Safestore is the UK's largest self-storage group with 182
stores on 31 January 2023, comprising 130 wholly owned stores in
the UK (including 72 in London and the South East with the
remainder in key metropolitan areas such as Manchester, Birmingham,
Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle, and
Bristol), 29 wholly owned stores in the Paris region, 7 stores in
Spain, 10 stores in the Netherlands and 6 stores in Belgium. In
addition, the Group operates 7 stores in Germany under a Joint
Venture agreement with Carlyle.
-- 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 more densely populated 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 90,000 personal and business customers.
-- As of 31 January 2023, Safestore had a maximum lettable area
("MLA") of 7.852 million sq ft (excluding the expansion pipeline
stores) of which 6.095 million sq ft was occupied.
-- Safestore employs around 750 people in the UK, Paris, Spain, the Netherlands, and Belgium.
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END
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