TIDMSAFE
RNS Number : 0002Y
Safestore Holdings plc
10 May 2021
10 May 2021
Safestore Holdings plc
Trading, Property Pipeline and Financing Update
Accelerating trading momentum and growing property pipeline.
Upgrade to full year earnings guidance.
Group Operating Performance Q2 2021 Q2 2020 Change Change-
(3) CER (2)
--------------------------------- -------- -------- --------- ---------
Revenue (GBP'm) 43.7 39.4 10.9% 11.2%
Revenue (GBP'm)- year-to-date
(YTD) 88.1 79.3 11.1% 10.5%
Closing Occupancy (let sq ft-
million)(5) 5.635 4.824 16.8% n/a
Closing Occupancy (% of MLA)(6) 80.7% 71.1% +9.6ppts n/a
Average Storage Rate (GBP) 26.56 27.00 (1.6%) (1.5%)
Average Storage Rate (GBP)-
YTD 26.51 26.52 (0.0%) (0.7%)
Group Operating Performance- Q2 2021 Q2 2020 Change Change-
like-for-like(4) (3) CER (2)
--------------------------------- -------- -------- ---------- ---------
Storage Revenue (GBP'm) 34.7 31.4 10.5% 10.5%
Ancillary Revenues (GBP'm) 7.2 6.7 7.5% 7.5%
Revenue (GBP'm) 41.9 38.1 10.0% 9.9%
Storage Revenue (GBP'm)- YTD 69.9 63.6 9.9% 9.1%
Ancillary Revenues (GBP'm)-
YTD 14.4 13.8 4.3% 4.3%
Revenue (GBP'm)- YTD 84.3 77.4 8.9% 8.3%
Closing Occupancy (let sq ft-
million)(5) 5.394 4.664 15.7% n/a
Closing Occupancy (% of MLA)(6) 82.3% 71.5% +10.8ppts n/a
Average Occupancy (let sq ft-
million) 5.349 4.739 12.9% n/a
Average Occupancy- YTD (let
sq ft- million) 5.307 4.795 10.7% n/a
Average Storage Rate (GBP) 26.63 26.98 (1.3%) (1.2%)
Average Storage Rate (GBP)-
YTD 26.55 26.68 (0.5%) (1.0%)
Highlights
-- Group revenue for the quarter in CER (2) up 11.2%
-- Group like-for-like (4) storage revenue in Q2 in CER (2) up
10.5% and like-for-like total revenue up 9.9%.
-- Like-for-like (4) occupancy up 10.8ppts at 82.3% (2020: 71.5%)
o UK up 11.8ppts at 82.4% (2020: 70.6%)
o Paris up 6.6ppts at 81.7% (2020 75.1%)
-- Contracts exchanged for two new development sites and two
store extensions in London as well as four new development sites in
Spain in Madrid and Barcelona which will together add c. 280,000 sq
ft of MLA
-- GBP150m of new competitively priced US Private Placement
financing secured with a further uncommitted Shelf debt facility of
c. GBP80m equivalent
-- COVID 19- stores operating normally with full observation of
social distancing rules and protective personal equipment provided
to employees
-- Full year earnings guidance revised upwards. Adjusted Diluted
EPRA Earnings per Share (7) expected to be in the range of 37p to
38p.
Frederic Vecchioli, Chief Executive Officer commented:
"Firstly, I would like to thank our staff for continuing to
perform excellently in what has been a challenging environment,
with varying degrees of COVID-19 lockdown restrictions in place in
all of our geographies during the period. Despite this, I am
pleased to report that the strong trading momentum reported for our
first quarter has accelerated in the second quarter of the year
driven by the strength of our UK performance combined with
continued robust results from our French and Spanish businesses.
The Group closing occupancy at 30 April 2021 was 5.635m sq ft (up
16.8% on 2020) or 80.7% (up 9.6ppts on 2020), while rate was
broadly flat. Our JV with Carlyle, operating in Belgium and the
Netherlands, continues to perform in line with its business
plan.
"Our Birmingham Middleway and Paris Magenta stores opened
successfully in recent weeks and our pipeline of new stores grew
significantly with contracts exchanged on four London stores or
extensions and four Spanish sites which together add c. 280,000 sq
ft of MLA.
"In addition, our financing capacity has been extended with the
issuance of a further GBP150m equivalent of new 7, 10 and 12 year
US Private Placement Notes which, in addition to a c.GBP80m shelf
debt facility, provides us with further flexibility to target
selected development and acquisition opportunities as they
arise.
"We continue to focus on the significant upside from filling the
1.3m square feet of fully invested currently unlet space in our UK,
Paris and Spain markets. Whilst the potential for disruption
arising from current COVID-19 crisis has not entirely abated, the
inherent resilience of our business model as well as our recent and
current trading allows me to look forward with optimism.
"The improving momentum in our second quarter performance gives
me further confidence in relation to the outlook for the full year
and I now anticipate that the business should deliver Adjusted
Diluted EPRA Earnings per Share(7) for 2020/21 in a range of 37p to
38p, which would represent an increase of 23% to 26% compared to
the prior year."
Business highlights
UK Trading Performance
UK Operating Performance Q2 2021 Q2 2020 Change
(3)
--------------------------------- -------- -------- ----------
Revenue (GBP'm) 33.6 29.5 13.9%
Revenue (GBP'm)- YTD 67.2 59.8 12.4%
Closing Occupancy (let sq ft-
million)(5) 4.466 3.745 19.3%
Closing Occupancy (% of MLA)(6) 81.0% 69.8% +11.2ppts
Average Storage Rate (GBP) 24.96 24.99 (0.1%)
Average Storage Rate (GBP)-
YTD 24.66 24.72 (0.2%)
UK Operating Performance- like-for-like(4) Q2 2021 Q2 2020 Change
(3)
-------------------------------------------- -------- -------- ----------
Storage Revenue (GBP'm) 26.1 22.9 14.0%
Ancillary Revenue (GBP'm) 6.4 6.0 6.7%
Revenue (GBP'm) 32.5 28.9 12.5%
Storage Revenue (GBP'm)- YTD 52.1 46.5 12.0%
Ancillary Revenue (GBP'm)- YTD 12.7 12.2 4.1%
Revenue (GBP'm)- YTD 64.8 58.7 10.4%
Closing Occupancy (let sq ft-
million)(5) 4.322 3.679 17.5%
Closing Occupancy (% of MLA)(6) 82.4% 70.6% +11.8ppts
Average Occupancy (let sq ft-
million) 4.286 3.741 14.6%
Average Occupancy- YTD (let
sq ft- million) 4.255 3.792 12.2%
Average Storage Rate (GBP) 25.03 24.91 0.5%
Average Storage Rate (GBP)-
YTD 24.69 24.66 0.1%
The UK business accelerated strongly in the second quarter with
total revenue up 13.9%. Like-for-like storage revenue was up 14.0%
whilst the performance of ancillary revenues improved with growth
of 6.7% compared to Q1 2020. As a result, total like-for-like
revenue was up 12.5% for the quarter. For the year-to-date,
like-for-like revenue was up 10.4% compared to 2020.
The strong UK result was driven by an excellent occupancy
performance. Like-for-like average occupancy grew by 14.6% compared
to Q1 2020 and the like-for-like closing occupancy at the end of
April 2021 was up 11.8ppts at 82.4% (2020: 70.6%). The second
quarter saw a like-for-like occupancy inflow of 82,000 sq ft
compared to an outflow of 118,000 sq ft in Q1 2020, which reflected
the impact of the first COVID-19 lockdown in March/ April 2020.
Like-for-like average rate was up 0.5% for the quarter and 0.1% for
the six-month period.
Total revenue growth of 13.9% reflected the strong like-for-like
performance, the 2020 store openings in Carshalton, Gateshead and
Sheffield, the annualisation of the acquisitions of our St John's
Wood and Chelsea stores and management fees from our Joint Venture
with Carlyle. All acquisitions and new store developments are
performing in line with or ahead of their business cases .
Paris Trading Performance
Paris Operating Performance- Q2 2021 Q2 2020 Change
total and like-for-like(4) (3)
--------------------------------- -------- -------- ---------
Storage Revenue (EUR'm) 9.91 9.80 1.1%
Ancillary Revenue (EUR'm) 0.97 0.90 7.8%
Revenue (EUR'm) 10.88 10.70 1.7%
Storage Revenue (EUR'm)- YTD 20.17 19.90 1.4%
Ancillary Revenue (EUR'm)- YTD 1.94 1.85 4.9%
Revenue (EUR'm)- YTD 22.11 21.75 1.7%
Closing Occupancy (let sq ft-
million)(5) 1.072 0.985 8.8%
Closing Occupancy (% of MLA)(6) 81.7% 75.1% +6.6ppts
Average Occupancy (let sq ft-
million) 1.063 0.998 6.5%
Average Occupancy- YTD (let
sq ft- million) 1.052 1.003 4.9%
Average Storage Rate (EUR) 38.25 39.94 (4.2%)
Average Storage Rate (EUR)-
YTD 38.67 39.88 (3.0%)
Revenue (GBP'm) 9.4 9.3 1.1%
Revenue (GBP'm)- YTD 19.5 18.7 4.3%
For the current year to date, it should be noted that all stores
in the portfolio are classified as like-for-like. Paris Magenta
opened in late April 2021 so had not meaningfully contributed to
revenue at the period end.
Paris had a solid quarter, growing revenue by 1.7% compared to
last year.
Occupancy performance was strong for the quarter with closing
occupancy at 81.7%, up 6.6ppts compared to 2020. The second quarter
saw an occupancy inflow of 26,000 sq ft compared to an outflow of
22,000 sq ft in Q1 2020, which reflected the impact of the first
COVID-19 lockdown in March/ April 2020.
The average storage rate was down 4.2% for the quarter driven by
promotional activity and a shift in the occupancy mix towards
bigger units which command a lower price per sq ft. Ancillary
revenues were strong, growing by 7.8% in the quarter.
Sterling equivalent revenue was up 1.1% for the quarter
reflecting a 0.6% strengthening in the average Sterling: Euro
exchange rate. For the year to date sterling revenue was up 4.3%
reflecting a 2.3% weakening in the average exchange rate over the 6
months period.
Spain Trading Performance
Our Barcelona business, which was acquired in December 2019,
grew total revenue by 11.5% for the quarter to EUR0.8m. Revenue for
the six months was EUR1.6m. Closing occupancy was up 0.3ppts at
89.4% (2020: 89.1%) whilst average rate for the quarter grew by
6.8% to EUR32.16 (2020: EUR30.10) with ancillary revenues improving
strongly.
Property Pipeline- UK/ Paris
Store Opening- Birmingham Middleway/ Digbeth
In July 2020, the Group completed the acquisition of a freehold
2.17-acre site including an existing warehouse in Birmingham. The
site is well located on the southern side of the inner A4540 ring
road and the new store opened in April 2021. Our existing nearby
store at Digbeth (MLA 44,500 sq ft) will close shortly with the
majority of customers expected to relocate to the Middleway site.
In due course, we intend to sell the Digbeth site, which has
residential development potential.
Store Opening- Paris Magenta
In April 2018, we agreed a lease on a site at Magenta in central
Paris. We are pleased to confirm that the 50,000 sq ft store opened
in late April 2021.
New development site- London- Lea Bridge
In April 2021, the Group exchanged contracts on a freehold 1.3
acre site at Lea Bridge in North East London. Subject to contract
and planning, we will open a 76,500 sq ft MLA store in 2024 as the
leases for existing tenants on the site have up to two years to
run. Rental income of approximately GBP170k per annum is currently
received on this site.
New development site- North East London
In April 2021, the Group exchanged contracts on a freehold site
in North East London. Subject to contract and planning, we will
open a 56,500 sq ft MLA store in 2025.
New store extension- London- Wimbledon
In April 2021, we exchanged contracts on the acquisition of a
0.5 acre site adjacent to our existing Wimbledon store (MLA
58,800). Subject to completion of this transaction, the existing
reception area will be relocated to a more prominent and visible
roadside location and a further 9,000 sq ft of storage capacity and
1,000 sq ft of offices will be added. The Wimbledon store's peak
occupancy, prior to the COVID pandemic, was 92%.
New store extension- London- Paddington Marble Arch
In May 2021, the Group exchanged contracts on a leasehold
basement car park adjacent to our existing Paddington Marble Arch
store. Subject to planning, a further 8,500 sq ft of space will be
added to our site. The occupancy of the Paddington Marble Arch
store at 31 March 2021 was 80%.
In addition, as previously announced, a separate satellite store
at Paddington Park West Place, with MLA of 13,000 sq ft will open
during 2023.
The total costs of acquisition and construction of the above
four new projects is anticipated to be c. GBP35m.
Property Pipeline Summary- UK
Store FH/ Status MLA SQFT Opening Other
LH
London- Lea Bridge FH Contracts exchanged/ 76,500 Q4 2024 New build.
subject to planning GBP170k pa of
rental income
prior to opening.
---- --------------------- ----------- -------- ------------------------
London- North FH Contracts exchanged/ 56,500 Q4 2025 New build.
East London subject to planning
---- --------------------- ----------- -------- ------------------------
London- Morden FH Completed/ Planning 52,000 Q4 2022 New build.
granted
---- --------------------- ----------- -------- ------------------------
London- Bermondsey FH Completed/ Subject 50,000 Q2 2026 New build.
to Planning
---- --------------------- ----------- -------- ------------------------
London- Paddington LH Completed/ Planning 13,000 Q2 2023 Conversion of
Park West granted Basement Car Park-
Satellite store
to existing Paddington
store
---- --------------------- ----------- -------- ------------------------
London- Paddington LH Contracts exchanged/ 8,500 Q1 2022 Extension of existing
Marble Arch subject to planning site via conversion
of adjacent basement
car park
---- --------------------- ----------- -------- ------------------------
London- Wimbledon FH Contracts exchanged/ 9,000 Q2 2022 Extension of existing
subject to planning storage site
1,000
office
---- --------------------- ----------- -------- ------------------------
Southend FH Completed/ Planning 10,100 Q4 2021 Extension of existing
granted site
---- --------------------- ----------- -------- ------------------------
London- Edgware FH Completed/ Planning 22,900 Q4 2021 Extension of existing
granted site
---- --------------------- ----------- -------- ------------------------
Total UK Pipeline MLA c. 300k
----------- ----------------------------------
Total Further UK Capex c. GBP53m.
----------- ----------------------------------
Property Pipeline- Spain
In December 2019 the Group completed the acquisition of OMB Self
Storage which operates three leasehold properties and one freehold
property, all very well located in the centre of Barcelona. The
four locations (Valencia, Calabria, Glories and Marina) have an MLA
totalling 108,000 sq ft. The occupancy of the business at the end
of April 2021, was 89.4%.
We are pleased to announce the next phase of expansion of the
business in Barcelona and its entry into Madrid with the following
sites.
New development site- Northern Madrid
In April 2021, the Group exchanged contracts on a freehold
building in a high population density area in northern Madrid.
Subject to contract and planning, we will convert the existing
building into a 48,000 sq ft MLA self-storage facility. It is
anticipated that the site will open in the second half of 2022.
New development site- Southern Madrid
In March 2021, the Group exchanged contracts on a freehold
building in southern Madrid. Subject to contract and planning, we
will convert the existing building into a 29,000 sq ft MLA
self-storage facility. It is anticipated that the site will open in
the second half of 2022.
New development site- Central Barcelona
In January 2021, the Group exchanged contracts on a freehold
building in a densely populated area in central Barcelona. Subject
to contract and planning, we will convert the existing building
into a 13,500 sq ft MLA self-storage facility. It is anticipated
that the site will open in the first half of 2022.
New development site- Northern Barcelona
In April 2021, the Group exchanged contracts on a freehold
building in northern Barcelona. Subject to contract and planning,
we will convert the existing building into a 36,300 sq ft MLA
self-storage facility. It is anticipated that the site will open in
the second half of 2022.
The total cost of acquisition and construction of the new
Spanish sites is anticipated to be c. EUR29m and the four stores
will add 127,000 sq ft of additional MLA.
Property Pipeline Summary- Spain
Store FH/ Status MLA SQFT Opening Other
LH
Northern Madrid FH Subject to contract 48,000 Q3 2022 Conversion of
and planning existing building
----- --------------------- --------- -------- -------------------
Southern Madrid FH Subject to contract 29,000 Q3 2022 Conversion of
and planning existing building
----- --------------------- --------- -------- -------------------
Central Barcelona FH Subject to contract 13,500 Q1 2022 Conversion of
and planning existing building
----- --------------------- --------- -------- -------------------
Northern Barcelona FH Subject to contract 36,300 Q3 2022 Conversion of
and planning existing building
----- --------------------- --------- -------- -------------------
Total Spain Pipeline MLA c. 127k
--------- -------- -------------------
Total Further Spain Capex EUR29m
--------- -------- -------------------
Financing
On 7 May 2021, Safestore extended its borrowing facilities with
the issuance of the equivalent of GBP150m new sterling and euro
denominated US Private Placement (USPP) notes with the following
coupons and tenors:
- GBP20m 7 year notes at a coupon of 1.96% (credit spread of 140 bps)
- EUR29m 7 year notes a coupon of 0.93% (credit spread of 105 bps)
- GBP80m 10 year notes a coupon of 2.39% (credit spread of 150 bps)
- EUR29m 12 year notes a coupon of 1.42% (credit spread of 118 bps)
The funds will be received in June 2021 and August 2021 and will
be used initially to pay down Revolving Credit Facilities (RCF)
thereby providing further capacity for medium-term growth.
The USPP notes were issued to a group of existing institutional
investors.
In addition, an uncommitted EUR115m Shelf facility, which can be
drawn in Euros or Sterling, was agreed with one existing lender,
giving the Group further financing flexibility. The facility would
be drawn in the form of Private Placement Notes at a coupon to be
agreed at the time of funding.
The existing USPP notes and banking arrangements remain
unchanged and consist of:
- A GBP250m revolving credit facility of which GBP157m is drawn
- A EUR70m revolving credit facility of which EUR30m is drawn
- EUR50.9m of 2024 USPP at a coupon of 1.59%
- EUR74.1m of 2027 USPP at a coupon of 2.00%
- GBP50.5m of 2029 USPP at a coupon of 2.92%
- EUR70m 7 year 2026 notes at a coupon of 1.26%
- GBP35m 7 year 2026 notes at a coupon of 2.59%
- GBP30m 10 year 2029 notes at a coupon of 2.69%
The average cost of debt of the Group remains broadly unchanged
at c. 2.2% and the weighted average tenor of our facilities has
increased from 4.0 years to 5.2 years.
The Group policy remains to maintain Group Loan to Value between
30% and 40% for the foreseeable future, providing flexibility to
target selected development and acquisition opportunities as they
arise.
Interim Results
The Group will announce its full Interim Results for the six
months to 30 April 2021 on 17 June 2021.
Ends
Notes
1 - Where reported numbers are presented either to the nearest
GBP01.m or to the nearest 10,000 sq ft, the effect of rounding may
impact the reported percentage change.
2 - 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).
3 - Q2 2020 is the quarter ended 30 April 2020.
4 - 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.
5 - Closing occupancy excludes offices but includes 14,000 sq ft
of bulk tenancy as at 30 April 2021 (30 April 2020 - 14,000 sq
ft).
6 - MLA is Maximum Lettable Area.
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.
Enquiries
Safestore Holdings plc 020 8732 1500
Frederic Vecchioli, Chief Executive Officer
Andy Jones, Chief Financial Officer
www.safestore.com
Instinctif Partners 020 7457 2020
Guy Scarborough, Bryn Woodward
Notes to editors:
* Safestore is the UK's largest self-storage group with
160 stores at 30 April 2021, comprising 127 wholly
owned stores in the UK (including 71 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) and 29 wholly owned stores in the Paris
region and 4 stores in Barcelona. In addition, the
Group operates nine stores in the Netherlands and six
stores in Belgium 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 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 75,000 personal
and business customers.
* As at 30 April 2021, Safestore had a maximum lettable
area ("MLA") of 6.983 million sq ft (excluding the
expansion pipeline stores, and the Carlyle Joint
Venture) of which 5.635 million sq ft was occupied.
* Safestore employs around 700 people in the UK, Paris
and Barcelona.
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END
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