Safestore slips highs as numbers shy of high expectations

Safestore's interim results were solid but like-for-like sales growth in the UK was just short of management’s guidance, though they continued to see "good levels of interest" in self-storage.

Revenue for the six months ended 30 April of £62.6m was up 16% or 12.4% in constant exchange rates, with underlying EBITDA of £34.2m up 17%, helped by a £1.1m boost from currencies.

With earnings per share up 16% to 10.4p, the dividend was lifted 17% of 4.2p.

On a like-for-like basis, revenue was up 7.1% or 3.7% at constant rates, driven by a 1.1 percentage point increase in LFL occupancy to 71.9% and 5.6% in the average rate to £27.51 per square foot.

LfL revenue growth in the UK was up 3.9%, versus guidance of 4-8%, with occupancy up 0.9 points to 69.5% and average rate up 1.7% to £25.28psf.

In Paris LFL revenue growth was up 2.9%, broadly in the middle of the 2-6% guidance range, as occupancy rose 1.5 points to 80.9% and the average rate by 2.7% to €40.78psf.

"Notwithstanding the uncertain macro-economic backdrop, the group continues to generate a record number of enquiries across its entire platform," said chief executive Frederic Vecchioli.

He said the recently acquired Space Maker business and the five new stores opened during the last twelve months were trading well and he announce the addition of another site in Paris, at Combs-la-Ville, which opened earlier this month.

"As we enter our peak trading period, we continue to see good levels of interest in self-storage in the UK and increasing momentum in Paris. We are well placed to meet this demand with our 1.7m square feet of currently unlet, fully invested space."

The recent refinancing at the end of May reduced the company's effective interest rate to roughly 2.3% from 3.5% and extended the weighted average maturity of debt from 3.4 years to 7.5 years, and, said Vecchioli, "improves our balance sheet capacity and flexibility, allowing us to continue to seek selected development and acquisition opportunities".

"The company is in a strong position and remains on-course to meet the board's full year expectations."

Shares in Safestore, which have risen moire than 25% this year to all-time highs, were down 3.2% to 439.7p by early afternoon on Thursday.