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Safestore Holdings plc

Safestore Holdings Plc Delivered a fifth year of double digit growth

Safestore Holdings Plc (LON:SAFE), today announced the final results for the year ended 31 October 2018.

Key measures


Year Ended 31 October 2018

Year Ended 31 October 2017




Underlying and Operating Metrics- total






Underlying EBITDA2





Closing Occupancy (let sq ft- million)3





Closing Occupancy (% of MLA)4





Average Storage Rate5





Adjusted Diluted EPRA Earnings per Share6





Free Cash Flow7





EPRA Basic NAV per Share






Underlying and Operating Metrics- like-for-like8






Underlying EBITDA2





Closing Occupancy (let sq ft- million)3





Closing Occupancy (% of MLA)4





Average Occupancy (let sq ft- million)3





Average Storage Rate5






Statutory Metrics

Profit before tax9





Basic Earnings per Share





Dividend per Share





Cash inflow from operating activities






Strong Financial Performance

· Group revenue for the year up 10.8% (10.4% in CER1)

· Like-for-like8 Group revenue for the year in CER1 up 5.2%

o UK up 5.2%

o Paris up 5.1%

· Underlying EBITDA2 up 11.0% in CER1 which, combined with a gain on investment properties of £122.1m (FY2017: £39.2m), drove an increase in Profit before tax9 of 134.9%

· Adjusted Diluted EPRA Earnings per Share6 up 15.5% at 26.8 pence; 13.8% increase in the final dividend to 11.15 pence (FY2017: 9.8 pence) giving a total for the year of 16.25 pence (FY2017: 14.0 pence)

Operational Focus

· Continued balanced approach to revenue management drives returns

o Like-for-like8 closing occupancy of 76.6% (up 2.7ppts on 2017)

o Like-for-like8 average occupancy for the year up 4.8%

o Like-for-like8 average storage rate5 for the year up 0.2% in CER1 with improving momentum as the year progressed (Q4 +1.8% in CER1) underpinned by continuing improvements in marketing and pricing analytics

o Total average storage rate5 down 3.3% in CER1 reflecting dilutive impact of Alligator acquisition and new store openings

· Alligator and new stores trading well and in line with business plans

Strategic Progress

· Twelve Alligator stores acquired on 1 November 2017 for £55.9m10 now integrated into the business

· Three new stores opened in the year at London Paddington Marble Arch, London Mitcham and Paris Poissy

· Four new stores in the pipeline with 210,000 sq ft of new space scheduled to open in London Carshalton, Birmingham Merry Hill, Paris Pontoise and Paris Magenta

Strong and Flexible Balance Sheet

· Bank Facilities extended to June 2023

· 20.9% increase in property valuation in CER1 driven by the Alligator acquisition, reduced exit cap rates and revised stabilised occupancy assumptions

· Group loan-to-value ratio (“LTV”11) at 31 October 2018 at 30% and interest cover ratio (“ICR”12) at 8.6x


· After nearly ten years with the Group, in accordance with good governance recommendations, Chairman Alan Lewis announces intention to retire from the Board

Frederic Vecchioli, Safestore’s Chief Executive Officer, commented:

“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. We have continued to seek high quality sites to open new stores and have successfully added four new stores to the pipeline which means we plan to open new stores in London-Carshalton, Paris-Pontoise, and Birmingham-Merry Hill during 2019, and subject to planning, Paris-Magenta in 2020.

Our strong balance sheet continues to provide the flexibility to target selected development and acquisition opportunities as they arise.

Over the last five years, the like-for-like occupancy has increased on average by 2.7ppts per year, moving from 63.1% to 76.6%. The Company is in an excellent position and, as ever, our top priority remains the significant organic growth opportunity represented by the 1.7m square feet of currently unlet space in our existing fully invested estate.

The start to the current financial year has been encouraging in all our geographies and our leading market positions in the UK and Paris, combined with our resilient business model, enable us to look forward to the future with confidence.”


1 – CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).

2 – Underlying EBITDA is defined as Operating Profit before exceptional items, share-based payments, corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties, contingent rent and depreciation. Underlying profit before tax is defined as underlying EBITDA less leasehold rent, depreciation charged on property, plant and equipment and net finance charges relating to bank loans and cash.

3 – Occupancy excludes offices but includes bulk tenancy. As at 31 October 2018, closing occupancy includes 26,000 sq ft of bulk tenancy (31 October 2017: 27,000 sq ft). The Group full year average occupancy figures (+4.4%) on page 1 of our Q4 trading update of 15 November 2018 were in fact the figures for the quarter ended 31 October 2018 and were described as full year in error. The full year average occupancy figures were up 4.8%.

4 – MLA is Maximum Lettable Area. At 31 October 2018, Group MLA was 6.37m sq ft (FY2017: 5.71m sq ft).

5 – Average Storage Rate is calculated as the revenue generated from self-storage revenues divided by the average square footage occupied during the period in question.

6 – Adjusted Diluted EPRA EPS is based on the European Public Real Estate Association’s definition of Earnings and is defined as profit or loss for the period after tax but excluding corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts. The Company then makes further adjustments for the impact of exceptional items, IFRS 2 share-based payment charges, exceptional tax items, and deferred tax charges. This adjusted earnings is divided by the diluted number of shares. The IFRS 2 cost is excluded as it is written back to distributable reserves and is a non-cash item (with the exception of the associated National Insurance element). Therefore neither the company’s ability to distribute nor pay dividends are impacted (with the exception of the associated National Insurance element). The financial statements will disclose earnings both on a statutory, EPRA and Adjusted Diluted EPRA basis and will provide a full reconciliation of the differences in the financial year in which any LTIP awards may vest.

7 – Free cash flow is defined as cash flow before investing and financing activities but after leasehold rent payments.

8 – Like-for-like like adjustments have been made to remove the impact of Alligator, 2017 opening of Combs-la-Ville, 2018 openings of Mitcham, Paddington Marble Arch and Poissy, 2017 closure of Deptford and 2018 closures of Leeds Central, Merton and Paddington.

9 – Profit before tax increased by £106.4m to £185.3m (FY2017: £78.9m) principally as a result of an increase in the gain on Investment properties of £82.9m to £122.1m (FY2017: £39.2m), complemented by an increase of £8.5m or 11.4% in Underlying EBITDA as a result of stronger trading performance.

10 – The consideration paid for Alligator on 1 November 2017 was £55.9m, net of cash acquired.

11 – LTV ratio is Loan-to-Value ratio, which is defined as gross debt (excluding finance leases) as a proportion of the valuation of investment properties and investment properties under construction (excluding finance leases).

12 – ICR is interest cover ratio, and is calculated as the ratio of underlying EBITDA after leasehold rent to underlying finance charges.

13 – Source: Self-Storage Association (“SSA”) Annual Survey (May 2018).


In 2018, Safestore has delivered a fifth year of double digit growth in Adjusted Diluted EPRA earnings per share characterised by a combination of organic and acquisitive growth. Total Group revenue increased by 10.8% (10.4% at CER1) with a strong performance across the UK (+11.8%) and continued strength in Paris (+5.9%). On a like-for-like8 basis in CER1, Group revenue increased by 5.2% with the UK up 5.2% and Paris up 5.1%. The Group’s like-for-like8 closing occupancy increased by 2.7 percentage points (“ppts”) to 76.6% with the average storage rate5 up 0.2% at CER1.

Our operational performance across the UK has been strong this year. Robust enquiry conversion, driven by our ongoing commitment to investing in and supporting our people, has resulted in like-for-like8 closing occupancy in the UK growing by 2.9ppts to 74.7%. Growth in occupancy across the UK has been healthy with the UK regions performing slightly more strongly than London and the South East.

In the UK, we completed the acquisition of the twelve store Alligator Self-Storage portfolio on 1 November 2017 for £55.9m10. The portfolio was successfully integrated during the year. In addition, two new stores in London-Mitcham and London-Paddington Marble Arch were opened on time and on budget.

In Paris, our performance has also been strong with like-for-like8 revenue growing by 5.1%. Average occupancy growth was 6.0% whilst average rate declined by 0.9% impacted, as expected, by the dilutive effect of our recent suburban opening at Emerainville. Like-for-like8 closing occupancy ended the year at 84.1% (FY2017: 82.6%). This is the twentieth consecutive year of revenue growth in Paris with average growth over the last six years of circa 5%. We opened a new store in Poissy in August 2018 which is trading in line with its business plan.

Group underlying EBITDA2 of £82.9m increased by 11.0% at CER1 on the prior year and by 11.4% on a reported basis reflecting the impact of the strengthening Euro on the profit earned from our Paris business. The Group’s EBITDA2 performance, combined with reduced finance costs arising from the annualisation of the refinancing of the Group’s USPP Notes and amendment and extension of the bank facilities completed in May 2017, resulted in a 15.5% increase in Adjusted Diluted EPRA EPS6 in the period to 26.8 pence (FY2017: 23.2 pence).

Our property portfolio valuation, including investment properties under construction, increased in the year by 20.9% on a constant currency basis, driven by the acquisition of Alligator and revisions to exit cap rates and stabilised occupancy assumptions. After exchange rate movements, the portfolio valuation increased by 21.2% to £1,220.9m with the UK portfolio up £176.7m to a total UK value of £921.1m and the French portfolio increasing by €38.6m to €337.2m.

Reflecting the Group’s strong trading performance, the Board is pleased to recommend a 13.8% increase in the final dividend to 11.15 pence per share (FY2017: 9.8 pence) resulting in a full year dividend up 16.1% to 16.25 pence per share (FY2017: 14.0 pence).


In the last two financial years, Safestore has further strengthened its market positions in both the UK and Paris with the acquisitions of Space Maker and Alligator, the opening of nine new stores and the establishment of a pipeline of a further four new stores. The Group has 1.7m square feet of fully invested unlet space available, offering significant operational upside in the existing portfolio. We remain focused 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.

The strong performance of the final quarter of 2017/18 has continued into the new financial year with LFL group revenue (CER) up 6.4% for the two months to December 2018. Our strong market positions, operational platform and geographical diversity enables the group to look forward with confidence to the 2018/19 financial year.