Safestore revenue and earnings rise despite Covid-19 challenges

Safestore said on Thursday that, despite the challenges of operating within the Covid-19 pandemic and the effects of various lockdowns, it performed “robustly” in the 2020 financial year, with group revenue up 6.9% to £162.3m.

The FTSE 250 company said like-for-like group revenue for the year ended 31 October at constant exchange rates was up 3.4%, with the UK improving 3.3% and Paris rising 3.8%.

Underlying EBITDA was 7.4% firmer at constant exchange rates at £93.9m, which, combined with an increased gain on investment properties of £126.5m resulted in a statutory operating profit of £212.2m for the year, up from £163.7m in the 2019 financial year.

Adjusted diluted EPRA earnings per share were 6% higher year-on-year at 30.2p, while diluted earnings per share rose to 84p from 62.6p, which the board put down to the higher property valuation gain in the 2020 financial year.

The directors announced a 5.8% increase in the final dividend to 12.7p, giving a total distribution for the year of 18.6p, compared to 17.5p in the prior year.

On the operational front, it said its “continued balanced approach” to revenue management and efficient marketing platform was driving returns, with like-for-like closing occupancy of 80.8% up 3.2 percentage points over 2019, with like-for-like average occupancy for the year up 2.3%.

It said the like-for-like average storage rate for the year was 2.0% higher at constant exchange rates, with the total average storage rate up 1.4% at constant currency, reflecting the dilutive impact of new store openings.

Safestore said new stores were trading well, and in line with business plans.

Looking at the balance sheet, the company’s group loan-to-value ratio was 29%, down from 31% year-on-year, with its interest cover ratio standing at 9.0x, compared to 8.9x a year earlier.

Unutilised bank facilities stood at £148m at year-end, with no borrowings to refinance before June 2023.

The company reported a 16.8% increase in property valuation, including investment properties under construction, driven by the acquisitions of Fort Box and OhMyBox in Spain, as well as new stores, revisions to exit cap rates, stabilised occupancy assumptions and foreign exchange rates.

“Through much of the year, the Covid-19 pandemic has presented unprecedented challenges and I would like to thank our staff for the tremendous effort and commitment demonstrated over recent months, allowing the business to react positively to the Covid-19 crisis,” said chief executive officer Frederic Vecchioli.

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

“Despite the pandemic, the group's business model demonstrated its resilience resulting in another strong performance for the year.”

Vecchioli said all geographies had performed well, with the UK business showing “particularly pleasing” momentum.

“Despite ending the year with record levels of occupancy, the business still has 1.4m square feet of currently unlet space in our existing fully invested estate, representing a significant organic growth opportunity.

“Our leading market positions in the UK and Paris, in addition to our presence in Spain and, through our joint venture, in Netherlands and Belgium, combined with our balance sheet strength and resilient business model, leave us well positioned for the future.”

Vecchioli said the strong performance of the final quarter had continued into the first two months of the new financial year.

“Whilst acknowledging the potential for disruption arising from current Covid-19 restrictions, the inherent resilience of our business model as well as our recent and current trading allow me to look forward with confidence to the 2021 financial year.”

At 0835 GMT, shares in Safestore Holdings were up 0.98% at 826p.