Safestore shares slump on FY earnings forecast as revenues fall

Safestore shares fell sharply on Wednesday as the self-storage specialist said it expected annual earnings to be in the lower half of consensus forecasts as it posted a fall in interim core earnings amid tough trading conditions in most of its markets.

The company on Wednesday said underlying earnings before interest, tax, depreciation and amortisation fell 3.7% to £67.1m for the six months to April. Revenue fell 0.8% to £109.2m, with the UK down 1.5% on a like-for-like basis while gains were made in France and Spain. Benelux outperformed with a 13.5% rise.

Revenue per available foot – a key metric used by the company – fell 1.3% to £27.86. Shares in the company were down almost 6% in London trade.

Pre-tax profit rose to £173.7m from £103.4m due to a gain on the revaluation of investment properties of £126.1m, partially offset by a decrease in underlying trading performance of £2.6m.

“As we look forward to the rest of the year, we expect to see trading move back into growth in the UK, notwithstanding the current short-term economic uncertainties, with continued growth in Europe leading to overall earnings per share for the full year in the lower half of consensus forecasts,” Safestore said.

Reporting by Frank Prenesti for Sharecast.com