Big Yellow occupancy performance drives revenue growth

The FTSE 250 firm said its closing net rent was up 2.7% year-on-year as at 31 March, with the average rate ahead 0.8% year-on-year and up 1.5% in the second half.

Cash flow from operating activities, after net finance costs, increased 13% to £63m for the 12 month period, while Big Yellow’s adjusted profit before tax was 12% higher at £61.4m.

The board confirmed a 12% increase in the company’s total dividend to 30.8p per share.

On the operational front, Big Yellow made acquisitions of new development sites in Wapping, Uxbridge, Bracknell, Hove and Slough during the year, taking its pipeline to around 640,000 square feet.

Planning consent was obtained at Manchester for a landmark city centre store of 60,000 square feet, and at Camberwell in London for a 72,000 square foot store.

Refinancing completed during the year also extended the term of the group's debt, and reduced its average cost, the board noted.

“We remain focussed on our core objective of increasing occupancy to 90%,” said executive chairman Nicholas Vetch.

“As we have previously indicated, higher levels of occupancy deliver more traction on pricing and drive rate growth and indeed we have seen that materialise in the second half of the year.”

Veitch explained that, as Big Yellow’s vacant capacity reduced the company had been more aggressively pursuing an expansion strategy.

“There are very few existing stores that are of sufficient quality available to purchase and brand as Big Yellow.

“We continue therefore to acquire raw land and develop our own stores, and are pleased to have secured a number of quality sites during the year.

“The development process however, of which we have unparalleled experience, remains long, does carry risk, and is increasingly complex.”

Risks external to the business remained, Veitch noted, adding that there would “no doubt” be setbacks in economic growth.

“It is for that reason that we keep the business very conservatively financed thus enabling us to plan and execute the next phase of growth.”