Safestore locks up growth thanks to store openings and acquisition

Thanks to a £122m uplift from the revaluation of investment properties, profit before tax of £185.3m in the year to 31 October was up 135% from the year before when there was just a £39.2m revaluation boost. The Alligator portfolio was acquired in November 2017 for £55.9m and drove the increase in the company’s property portfolio.

Still, revenue jumped 10.8% to £143.9m as new openings at London Paddington Marble Arch, London Mitcham and Paris Poissy traded in line or ahead of business plans. Like-for-like revenue increased 5.2% at constant exchange rates, with the UK up 5.2% and Paris up 5.1%.

Adjusted diluted EPRA earnings per share jumped 15.5% to 26.8p, while the dividend was upped to 16.25p from 14.0p.

Like-for-like average occupancy for the year was up 4.8%, with the occupancy level at 31 October standing at 76.6%, up from 73.9% a year earlier.

Chief executive Frederic Vecchioli said: "We have delivered another successful year of growth characterised by strong organic performance, efficient integration of our recent acquisitions and good performances from our recently opened new stores. The fully integrated Alligator portfolio of twelve stores, acquired at the beginning of the financial year, is performing well."

The FTSE 250 company’s cash and cash equivalents stood at £10.5m at the end of the year, down from £65.6m at the same point last year.

In 2019 Safestore plans to open further new stores in London-Carshalton, Paris-Pontoise and Birmingham-Merry Hill, and subject to planning, Paris-Magenta in 2020.

The new financial year has seen LFL group revenue up 6.4% for the two months to December.

Vecchioli said the focus remained on "further optimising the group's operational performance whilst our balance sheet strength and flexibility provides us with the opportunity to actively consider further selective development and acquisition opportunities in our key markets".

Safestore’s shares were up 2.84% at 542.50p at 0948 GMT.

The EPS growth was 2% ahead of forecast, said broker Liberum. "The UK & Paris have again delivered strong gains in occupancy and, positively, pricing continues to improve... Safestore’s regional diversity and the scale of self-help potential in its new and acquired stores continues to generate good growth."