Big Yellow Group sees 1H revenues grow but cautions on outlook

Self-storage company Big Yellow Group’s interim revenues and capacity grew, while it said it would face future challenges with a mixture of “caution and confidence” due to the current uncertain economic climate after the referendum vote.

For the six months ended 30 September, total revenues increased 9% to £54.8m, compared to the same period last year, while like-for-like revenue rose 7% to £53.8m.

Nicholas Vetch, executive chairman, said only time will tell whether the political events of the last six months such as Brexit, would translates into economic reversals, but the company is on “heightened alert”.

“It would not come as a surprise to us for activity levels and demand in the next year or two to be more subdued than in recent years. That said, we have been planning for this eventuality since 2008, and believe that the business is well placed to face down most challenges.

“Whilst demand for self storage will ebb and flow, new supply in our key areas of operation, a key risk to the business, will, in our view, be constrained over the medium to longer-term. We therefore look forward to future challenges with a mixture of caution and confidence."

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 11% to £36.9m, and adjusted pre-tax profit was up 13% to £27m.

Adjusted diluted earnings per share increased 12% to 16.9p.

Cash flow from operating activities, after finance costs, rose 10% to £28.9m.

At the end of September, like-for-like occupancy was up 2.7 percentage points to 79% compared to 76.3% at 31 March.

The company bought four stores in April for £21m, sites in Nine Elms and Twickenham were bought by Big Yellow and sites in Canterbury and West Molesey were acquired by Armadillo Self Storage, which the company holds a 20% interest in.

Occupancy growth was 210,000 square feet, up from 200,000 square feet last year. The growth in the closing net rent per square feet on a like-for-like basis was 2.8%.

The company declared an interim dividend of 13.5p per share, up 12% from last year.

"This is a good set of results [...] BYG is well placed with a sector leading operational platform (including a strong online platform), there is limited new supply of stores coming into the market and we believe that, should there be a slowdown, both BYG and SAFE will grab further market share," Numis analysts Robert Duncan and Paul Gorrie said in a research note sent to clients.

Shares in Big Yellow Group were up 0.52% to 671.50p at 0845 GMT.