Safestore set to beat guidance on earnings per share

Safestore reported “strong momentum” in its final quarter in a trading update on Wednesday, with group revenue up 21% at constant exchange rates to £51.1m, and for the full year ahead 15.5%.

The FTSE 250 storage operator said like-for-like group revenue for the year was ahead 13.8% at constant currency, at £178.7m, with the UK up 16.8% and Paris rising by 4.3%.

It reported “strong” occupancy performance, with group like-for-like closing occupancy at 85.1%, which was five percentage points higher than in the fourth quarter of 2020.

Group like-for-like average occupancy for the year was 9.2% firmer, while the group’s like-for-like average storage rate for the final quarter was ahead 10.8%, and up 2.4% at constant exchange rates for the year.

A new freehold development site had been acquired on the Old Kent Road in London, which the board said would add 76,500 square feet of maximum lettable area.

Planning permissions had been granted, meanwhile, for Safestore’s previously-announced 48,000 square foot Northern Madrid and 30,000 square foot Southern Barcelona sites.

The company said planning permission had also been granted for an extension to its Winchester site, adding 11,000 square feet of maximum lettable area.

Safestore’s property pipeline now totalled 800,000 square feet of maximum lettable area.

The directors said full-year earnings to 31 October were anticipated to be “slightly ahead” of their previous guidance of adjusted diluted EPRA earnings per share of between 39.5p and 40p.

“All geographies have performed strongly and have shown good momentum in the final quarter,” said chief executive officer Frederic Vecchioli.

“The UK business has traded particularly well this quarter, with closing occupancy up by six percentage points at 85.4% and exceptionally strong growth in average rate in the final three months driving like-for-like revenue growth of 16.8% for the year.

“Our Paris business saw pleasing average rate improvement in the final quarter and, combined with 4.8 percentage points of like-for-like occupancy growth for the year, to 83.6%, grew like-for-like revenue by 4.3%.”

Vecchioli said the Spanish business, in its first full year of ownership, also performed ahead of expectations.

“Our property pipeline continues to grow and we now have 800,000 square feet planned to open over the coming years in the UK, Paris and Spain, representing growth of 11% in the size of our estate.

“In November, we added a further freehold London site to our pipeline in the Old Kent Road area.

“Our pipeline will be financed by our free cash flow and existing debt facilities and we anticipate further additions over the coming months.”

Safestore had weathered the pandemic well, Frederic Vecchioli said, and was now in a “very strong” position.

“Despite the current high levels of occupancy, the business still has 1.1 million square feet of currently unlet space in its existing fully-invested estate in addition to 0.8 million square feet in its pipeline.

“This represents a significant organic growth opportunity in what remains a fragmented and growing market.

“Our leading market positions in the UK and Paris, combined with our balance sheet strength and resilient business model, leave us well positioned for the future.”

At 0828 GMT, shares in Safestore Holdings were up 1.59% at 1,281p.