Safestore hikes dividend and sees strong self-storage outlook

Safestore hiked its dividend 20% after a strong trading year to end-October, with the self-storage group revealing a positive outlook for trading in the UK and France and a new development site in Paris.

Total underlying sales of £129.9 were up 12.6% on the previous year, or 105 at constant exchange rates, with underlying earnings before interest, tax, depreciation and amortisation rising 13.6% to £72.9m.

Like-for-like revenues were up 5.9% to £117.7m, with underlying EBITDA up 8.3% on a LFL basis to £66.6m. The financials benefited from occupancy rates improving to 3.57 from 3.52 the year before and average storage rates rising to £27.35 from £26.26.

Over the last 18 months, the FTSE 250 group has developed and opened six new stores in the UK and Paris, supported by the acquisitions of Space Maker and Alligator Self Storage, which added 24 stores in the UK to take the group total to 146 stores by the year end. The development pipeline contains four new stores in London, Birmingham and Paris.

Earnings per share rose almost 18% to 23.3p on a cash tax adjusted basis. The dividend was hiked just over 20% to 14.0p.

On a statutory basis, profit before tax fell 17% to £78.9m and basic EPS dropped 11% to 37.4p. This was as a result of £17.7m of costs, including refinancing costs of £16.3m, a reduction in the gain on investment properties by £2.5m to £39.2m.

Chief executive Frederic Vecchioli called it a successful year, achieved through a combination of organic and acquisitive growth combined with a strong operational performance.

He said the refinancing last May has resulted in a "strengthened, efficient, low cost balance sheet which gives us the flexibility to continue to target selected development and acquisition opportunities", with £108m of available bank facilities at the year end. The change resulted in savings of circa £3m per year in finance costs on a pro forma basis and saw the group loan-to-value ratio at 31 October at 36% and interest cover ratio at 6.7x

On the outlook, Vecchioli said: "We enter the new financial year in a strong position with substantial growth potential from the integration of Alligator Self Storage and the development of three new sites. However, our priority and the largest opportunity remains the significant upside from our 1.7m square feet of invested unlet space."