Safestore flags strong fourth quarter performance

Safestore reported a 5.4% improvement in group revenue for the fourth quarter at constant exchange rates on Wednesday, to £42.8m, adding that all of its stores were operating as usual despite the return to more stringent Covid-19 restrictions.

The FTSE 250 company said like-for-like group storage revenue for the year was ahead 4.3% at constant currency, with the UK up 4.4% and Paris rising 4.1%.

It said it saw “strong” occupancy performance in the year, with group like-for-like closing occupancy at 80.8%, up 3.2 percentage points on the fourth quarter of 2019.

Group like-for-like average occupancy for the year was up 2.3%.

Safestore reported a record fourth quarter increase in like-for-like occupancy in the UK of 228,000 square feet, compared to 5,000 square feet in the final quarter of the 2019 financial year, with the firm having now recovered its pre-lockdown year-on-year position.

The group like-for-like average storage rate for the year was up 2.0% at constant exchange rates.

Operationally, the board confirmed that planning permission had been granted on the Birmingham Middleway site, and added that anticipated adjusted diluted EPRA earnings per share would be in line with its expectations.

“I am pleased to report a strong final quarter's trading resulting in another good performance for the year,” said chief executive officer Frederic Vecchioli.

“Through much of the year, the Covid-19 pandemic has presented unprecedented challenges and I would like to thank our staff for their tremendous effort and resilience demonstrated over recent months, allowing the business to react positively to the Covid-19 crisis.

“As we navigate through further Covid-19 restrictions, I am confident that the business will continue to respond well to the challenge.”

Vecchioli said all geographies had performed “well”, with the UK business showing “particularly pleasing” momentum, growing like-for-like occupancy by 4.2 percentage points to 81.0% in the final quarter.

“Since 2013, we have added 19.5 percentage points of occupancy to the 113 stores still in the group today, which now have an occupancy of 82.6% - an average increase of 2.8 percentage points per annum.

“Over that period the same stores have grown average rate by 13.6% - a compound annual growth rate of 1.8% per annum.”

Vecchioli noted that, further to its successful openings in Carshalton, Gateshead and Sheffield so far this year, Safestore was planning to open new stores in Birmingham Middleway and Paris-Magenta during the 2021 financial year.

“Despite the pandemic, the Company continues to be in a very strong position.

“Notwithstanding the recent strong occupancy performance, the business still has 1.4 million square feet of currently unlet space in our existing fully invested estate, representing a significant organic growth opportunity in what remains a fragmented market.

“Our leading market positions in the UK and Paris, combined with our balance sheet strength and resilient business model, leave us well positioned for the future.”

The company remained on course to meet the board's full-year expectations, Vecchioli said.

At 1037 GMT, shares in Safestore were up 0.2% at 816.1p.