Final Results

RNS Number : 9834L

Big Yellow Group PLC

17 May 2010

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

audited Results for the YEAR and FOURTH Quarter ended 31 MARCH 2010

Big Yellow Group PLC, the UK's leading self storage brand, is pleased to announce results for the year and for the fourth quarter ended 31 March 2010.

Financial Highlights

· Occupancy growth of 140,000 sq ft across all stores (2009: occupancy fall of 75,000 sq ft)

· Storage revenue for the fourth quarter increased by 5% to £13.7 million from £13.0 million for the same quarter last year

· Storage revenue for the second half of the year of £27.7 million up 1% compared to the first half of the year of £27.4 million

· Revenue of £58.0 million, a reduction of £0.5 million compared to the prior year

· Store EBITDA £32.7 million compared to £33.0 million in 2009

· Adjusted profit before tax¹ of £16.5 million up 20% (2009: £13.8 million)

· Adjusted earnings per share² up 9% to 12.99 pence (2009: 11.89 pence)

· Cash inflows from operating activities (after finance costs) increased to £19.1 million for the year (2009: outflow of £6.1 million)

· Group net debt reduced by £38.7 million to £269.4 million from £308.1 million at 31 March 2009

· Adjusted net assets per share³ up 3% to 453.3 pence from 440.7 pence as at 31 March 2009. The opening net assets per share have been adjusted for the placing which took place in May 2009 (see note 12)

· Final ordinary dividend of 4 pence per share declared (2009: nil pence per share)

¹ See note 10 ² See note 12 ³ See notes 12 and 14

Statutory

· Profit before tax for the year £10.2 million (2009: loss of £71.5 million)

· Basic earnings per share 8.11 pence (2009: loss of 62.86 pence)

· Basic net assets per share 424.0 pence (2009: 422.6 pence adjusted for the effect of the placing)²

Achievements

· Successful placing of 11.5 million shares in May 2009 raising £31.5 million net of expenses

· In the December and March quarters, the Group has returned to delivering revenue, store EBITDA and cash flow growth year on year

· Lloyds TSB Bank plc and HSBC Bank plc have joined the core banking facility, taking a participation of £100 million and £25 million respectively

· Continued expansion with the opening of 6 stores in the year: Twickenham in the wholly owned Group and Edinburgh, Nottingham, Poole, Sheffield Bramall Lane and Reading in Big Yellow Limited Partnership. 60 stores are now open with a further 10 committed, providing 4.4 million sq ft of self storage space when completed

· Five planning consents obtained in the year. All bar one of our development sites now has planning consent.

Nicholas Vetch, Chairman of Big Yellow commenting on the outlook said:

"In the quarter to March we saw the start of the usual seasonal pick up, which was stronger than in 2009. There is clearly a recovery under way in the performance of this business evidenced by year on year quarterly growth and the levels of reservations, phone calls and web enquiries coming into the business. The pace of this recovery will to some extent depend on continuing improvement in housing transactions and economic growth, which drives business and consumer confidence.

In an improving economic environment, with growing self storage demand from businesses and consumers, we are confident that our brand positioning, the prime locations of our purpose built stores and excellent levels of customer service, will deliver outperformance. Our principal medium term objective remains to drive cash flow through improving the occupancy of the Group's wholly owned stores from 56% to 85%. The overhead structure in both the stores and head office required to achieve this is embedded and therefore the vast proportion of new revenue falls through to operating profit and cash flow. "

For further information, please contact:

Big Yellow Group PLC 01276 477811

Nicholas Vetch, Executive Chairman

James Gibson, Chief Executive Officer

John Trotman, Chief Financial Officer

Weber Shandwick Financial 020 7067 0700

Nick Oborne, John Moriarty

Notes to Editors

Big Yellow Group PLC is the best known and one of the most dynamic self storage groups in the UK. It was founded in September 1998 by Nicholas Vetch, Philip Burks, and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in June 2002.

Big Yellow has expanded rapidly and now operates from 60 stores, 53 in London and the South, two in Sheffield, and one each in Birmingham, Edinburgh, Leeds, Liverpool, and Nottingham. There are a further 10 stores in development. Of the 70 total stores and sites, 59 are held freehold and four long leasehold (together representing approximately 94% by value of the total property assets); seven stores are held short leasehold. All the stores have distinct yellow branding, with the majority being within the M25 or in strong urban conurbations. When fully built out the portfolio will provide approximately 4.4 million sq ft of flexible storage space.

The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Its focus on the location and visibility of its buildings, coupled with excellent customer service, has created the most recognised brand name in the UK self storage industry.

Chairman's Statement

Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company"), the UK's leading self storage brand, is pleased to announce results for the fourth quarter and year ended 31 March 2010.

The Group is currently enjoying a recovery which we believe will show an improving trend. This is unlikely to be linear and no doubt we will have setbacks, and whilst we remain wary, on balance there are more grounds for optimism.

Since the spring of last year, we have seen an improving level of demand, and over the summer delivered significantly more occupancy growth than in the prior year. The first half growth across the wholly owned portfolio was 62,000 sq ft against a decline of 10,000 sq ft last year. In the second half of the year, our traditionally weaker trading period, occupancy grew by 4,000 sq ft, compared to a decline of 75,000 sq ft in the prior year. If we include the stores in Big Yellow Limited Partnership, total growth in occupancy over the year was 140,000 sq ft.

This growth has been achieved whilst improving our rental yield, from a low of £25.25 in April 2009 to £26.85 at 31 March 2010, an increase of 6%. This is in line with the slowly improving picture in relation to housing transactions, consumer and business confidence and the economy generally experienced so far.

Financial Results

Revenue for the year was £58.0 million (2009: £58.5 million), a reduction of £0.5 million, principally caused by a reduction in short term tenant income of £0.4 million as a result of obtaining vacant possession on development sites. EBITDA for the 51 wholly owned stores fell by £207,000 to £32.7 million.

We are pleased to report that the year on year comparisons have now turned positive, with storage revenue for the fourth quarter increasing by 5% to £13.7 million from £13.0 million for the same quarter last year. Encouragingly storage revenue in the seasonally weaker second half of the year was £27.7 million, up 1% from £27.4 million for the first half of the year, and up 3% from £26.8 million for the second half of the year ended 31 March 2009.

The Group made an adjusted profit before tax in the period of £16.5 million (up 20% from £13.8 million in 2009, due to savings in the net interest expense in the year). This translated into a 9% increase in adjusted earnings per share to 12.99 pence (2009: 11.89p).

The Group made a profit before tax for the year of £10.2 million, compared to a loss of £71.5 million last year. This improvement in Group profitability reflects the increase in the valuation of the Group's open stores coupled with the improved recurring profit offset by the write down of assets in the course of development.

Cash inflows from operating activities (after finance costs) increased to £19.1 million for the year (2009: outflow of £6.1 million).

The Group remains relatively conservatively geared with net bank debt of £269.4 million at 31 March 2010 (2009: £308.1 million). This represents approximately 33% (2009: 38%) of the Group's gross property assets totalling £815.8 million (2009: £808.7 million) and 45% (2009: 57%) of the adjusted net assets of £593.8 million (2009: £543.8 million).

Placing to fund future growth

We were pleased to receive strong support from our shareholders in May 2009 to enable us to raise £31.5 million (net of expenses). 11.5 million shares were issued at £2.85, which represented a 6% premium to the previous day's closing share price.

The net proceeds of the placing, together with cash generated from operations and the net proceeds of the future sale of surplus land, will be used to provide the Group with the financial flexibility to fund its planned medium term organic growth.

Since the placing, we have started construction at Eltham, commenced the process of development at New Cross and have completed the acquisition of a site at Enfield, which had been acquired on a conditional basis in 2007. Of the £31.5 million, £24.7 million (78%) has been incurred or committed. The balance will be spent on building out the development pipeline.

Dividend

No Property Income Dividend is payable for the year, due to shadow capital allowances offsetting the Group's tax exempt profits, coupled with brought forward notional losses in the tax exempt business.

The Board recommended the suspension of the discretionary interim dividend in November 2008. The reason for the suspension was to allow the Group to retain operating cash surpluses to build out its existing pipeline of London stores without increasing debt levels. We are currently seeing an improving economic and self storage demand outlook, and the Group's performance has reflected this. We have reviewed our anticipated capital expenditure over the medium term, our forecast operating cash flow and the resultant levels of debt, balance sheet gearing and income cover. Following this review, the Board has resolved to reinstate a discretionary ordinary dividend at a level from which we expect to show sustainable growth in line with improving cash flows.

A final dividend of 4 pence per share has therefore been proposed.

Valuation and Net Asset Value

The value of the open store investment property portfolio at 31 March 2010 was £761.6 million, up from £735.1 million at 31 March 2009.

The investment property valuations of the 50 stores open at 31 March 2009 increased by £11.3 million (2%). The revaluation gain arose principally in the second half of the year. There was also an increase to the portfolio of £15.2 million as a result of one new store opening at Twickenham.

The revaluation gain arising on the wholly owned stores was offset by a £13.3 million revaluation loss arising on the Group's development sites. This write-down was as a result of valuing seven sites as investment property under construction for the first time to comply with the IAS 40 (revised) accounting requirement (see Financial Review for more detail). The stabilised valuations of these seven assets are currently pointing to a revaluation surplus on total development cost of £99 million (118%).

Each store is reviewed and valued individually by Cushman & Wakefield LLP, who are the valuers to a significant proportion of the UK and European self storage market. There has been a slight improvement in capitalisation rates of 12 bps offset by a reduction in the stabilised occupancy levels of certain stores. It should be noted that there has been one significant transaction in the year, which was in the secondary self storage space. We might have expected a wider price discount for this portfolio given its secondary nature, and we believe this reflects well on our own carrying values.

In addition, there have been no material commitments made on new sites in the self storage market as a whole, with a significant reduction in openings expected in 2010. The reduced liquidity to the independent operators from banks we believe will assist in restraining supply over the short to medium term.

We estimate that there are approximately 120 prime, purpose built self storage assets in urban conurbations in the UK of which we own 51 with a further nine in our partnership with Pramerica. The remainder are owned by multi site competitors who we doubt are sellers of their prime assets, in line with ourselves.

The recurring profit and small revaluation deficit for the year results in an adjusted fully diluted net asset value of 453.3p, an increase of 3% over the prior year (see note 12).

93% by value of the Group's 51 wholly owned open stores are freehold (including one long leasehold). The freehold proportion will increase as the Group opens stores in the development pipeline, all of which are freehold.

Stores and the Brand

Over the last 10 years Big Yellow has established itself as the UK's leading self storage brand with customer recognition exceeding our nearest rival by three times. We believe that this will have a significant impact as activity levels improve in coming years.

We continue to innovate to improve the prospect and customer experience of Big Yellow. In February 2009 we launched our new website with fully integrated reservations online and have recently introduced a pre check in process online for all customers who have reserved. We anticipate this will save 30% of time from the move-in process. In addition, we now show on our website externally managed reviews for existing and past customers, using a hotel style star system. Currently over 50% of our customers have given 5 stars out of 5 and the average rating is 4.6 out of 5 stars (or 92%) across the portfolio. This demonstrates our commitment to very high levels of customer service, which has been at the centre of our core values since opening the first Big Yellow store in Richmond in May 1999.

A table summarising the performance of these 51 directly owned stores, and the nine stores operating within Big Yellow Limited Partnership over the year can be found in the portfolio summary.

Banking

Lloyds TSB Bank plc and HSBC Bank plc have joined our core banking syndicate during the year, taking £100 million and £25 million respectively of the £325 million facility. I would like to thank them for their support, and we look forward to developing our relationships further with them in the future.

Big Yellow Limited Partnership ("The Partnership" or "Joint Venture", or "BYLP")

Our joint venture with Pramerica Real Estate Investors Limited is performing well. Planning consents have been obtained on all the sites. The Partnership has enjoyed considerable benefits from falling construction prices and interest costs, reducing the capital requirements. Nine of the 12 stores are now open with a further two currently under construction. It is too early to make a definitive judgement but initial trading performance of the stores in the Partnership has been relatively encouraging, with occupancy growth of 74,000 sq ft over the year, and net achieved rents increasing by 12% to £18.99 per sq ft.

Property

We have obtained planning consents on five stores since April 2009, including at New Cross where we have recently had our planning appeal allowed. We were also delighted to receive planning consent on our proposed new purpose built 75,000 sq ft store in Chiswick located on the A4 with very high visibility from the M4 flyover in west London. We now have consent on all of our pipeline stores with the exception of our site in central Manchester, where we are in detailed negotiations for the scheme with the City Council.

The six freehold stores in development with planning consents consist of five prime sites in London (Chiswick, Eltham, Enfield, Gypsy Corner and New Cross), and a prime site in central Guildford. The capital expenditure that would be required to complete these six wholly owned development sites is approximately £44 million. Our current intention is to build out these stores on a phased basis over the next two years.

Although we did not make any site acquisitions in the year given the development pipeline, we continue to monitor selective site opportunities, with a focus on London.

During the year we sold surplus land adjacent to our Twickenham store for a consideration of £3.2 million. In addition we have agreed to sell our surplus site at Clapham North and have entered into an option agreement with a social housing developer. A planning application is shortly to be submitted on our site at Richmond for hotel use and we are in detailed lease negotiations with a national hotel operator. In addition, we are in detailed negotiations, but no contract has been executed in respect of the sale of our land at Blackheath.

At 31 March the current carrying cost of the land surplus to our requirements is £20 million. We currently expect proceeds from the sale of these properties to at least match that figure.

Sustainability

Three years ago we appointed a Corporate Social Responsibility Manager to drive change in relation to how we construct and operate our stores, so as to reduce our impact on the environment. We see environmental and social objectives as core values in our business, which are increasingly scrutinised by all our stakeholders. During the year we were delighted to be ranked as the number one European real estate company in the Maastricht University "Environmental Real Estate Index" survey.

The Group is a member of the FTSE4 Good Index series and has previously engaged in the International Carbon Disclosure Project. In January 2010, Big Yellow received certification for achieving the Carbon Trust Standard (CTS), reducing carbon emissions across the whole store portfolio and operations with an absolute reduction of 4.8% and a relative reduction to turnover of 7.8%.

Our People

We are very pleased to have been ranked 25^th in the Sunday Times "Best 100 Companies to Work For" list for 2010. The results of this survey are testament to the Group not just talking about our work environment, but also actively doing something about it.

As we have consistently reported, the Big Yellow team has remained largely stable, both at Head Office and within the stores. In 2009 we had our first ten year anniversary celebration for 17 valued employees, and this year there are a further 12 reaching that milestone. Never complacent on this issue however, we are constantly investing in our people, which we believe is reflected in the very pleasing ratings we have received in our online customer reviews.

I would like to take the opportunity of thanking all the people who work at Big Yellow for their continued efforts, loyalty and hard work which, at the risk of repetition, really does make the difference between success and failure in our business.

Outlook

In the quarter to March we saw the start of the usual seasonal pick up, which was stronger than in 2009. There is clearly a recovery under way in the performance of this business evidenced by year on year quarterly growth and the levels of reservations, phone calls and web enquiries coming into the business. The pace of this recovery will to some extent depend on continuing improvement in housing transactions and economic growth, which drives business and consumer confidence.

Nicholas Vetch

Chairman

14 May 2010

Business Review

Introduction

This has continued to be a challenging environment for the Group, as the financial crisis which started in August 2007, turned into a deep economic downturn, from which the economy would appear to be slowly recovering. Nevertheless, our performance has been relatively resilient, although not immune. We believe that resilience is owing to a combination of factors including:

- a prime portfolio of freehold self storage properties

- focus on London and the South East, which have proved more resilient during the downturn

- successful acquisition and development of new stores

- the strength of operational and sales management

- the UK's leading self storage brand, with high public awareness

- strong cash flow generation and high operating margins

- flexible and conservative financing, with a senior debt facility in place until 2013, and hedging in place over £190 million of debt to September 2015

Business Objectives

In recent years, Big Yellow has established itself as the leading self storage brand in the UK (YouGov Survey, September 2009), a key objective set at flotation. The Group continues to invest in developing quality assets at the premium end of the self storage market and to build on our brand leadership nationally. We intend to measure our progress by commissioning quantitative research each year.

We opened our first store outside our core area in Leeds in 2005 and have opened stores over the past two years in Birmingham, Edinburgh, Liverpool, Nottingham and two in Sheffield. We have further sites under development in Manchester and Stockport.

The main elements of our strategy are:

- growing the occupancy in our stores from the current level of 56% to 85% over the medium term

- an unwavering focus on customer service

- excellent operational and financial management generating strong cash flow growth

- innovative and creative marketing

- recruiting and retaining quality people in the business

- the selective build out of freehold stores in major urban conurbations throughout the UK

- locating stores in visible, convenient and accessible locations

- retaining a focus on London, the South and other large metropolitan cities

- financing using flexible bank borrowings secured against a prime freehold portfolio, and our Partnership with Pramerica

- an entrepreneurial and passionate culture, with accessible senior management encouraging innovation and dialogue throughout all levels of the business

Financing Objectives

Big Yellow's financing policy is to fund its current needs through a mix of debt equity, and cash flow to allow us to build out the existing portfolio and achieving our strategic growth objectives, which we believe improve returns for shareholders.

We aim to ensure that there are sufficient medium term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by our strong operational cash flows.

Store Performance

In all Big Yellow stores, the occupancy growth in the current year was 140,000 sq ft, against a fall of 75,000 sq ft in the prior year. There was a net gain of 66,000 sq ft in our wholly owned stores, compared to a loss of 85,000 sq ft in the year to 31 March 2009, and a gain of 37,000 sq ft in the year to 31 March 2008. In the year ended 31 March 2008 we saw occupancy growth in the first few months of the year, but in the period after the onset of the liquidity crisis in August 2007, the Group lost occupancy of 100,000 sq ft.

During the year we moved in over 39,000 customers into all stores (including those in the Partnership) taking 2.4 million sq ft compared to 34,000 customers taking 2.1 million sq ft last year. Of the 51 wholly owned stores open at the year end, 50 are now trading profitably at the EBITDA level, with the other being Twickenham which opened in the year.

During the year we opened six stores, one wholly owned store in Twickenham, and five within Big Yellow Limited Partnership in Edinburgh, Nottingham, Poole, Sheffield Bramall Lane, and Reading. These store openings bring the number now trading in the Group and the Partnership to 60. The available net lettable space increased by 380,000 sq ft over the year to a total of 3.8 million sq ft with the opening of these six stores.

We have a rolling programme of price increases to existing storage customers, in most cases providing an annual increase in storage rents of 4.25%. Over the last six years average net storage rental growth has been 5.3% per annum.

Over the winter of 2008/9, following the collapse of Lehman Brothers and the resultant anticipated consumer downturn, we used aggressive promotions and discounting in all of our stores to combat the weak trading environment. As a consequence, net rent for the Group fell to a low of £25.25 per sq ft in April 2009. We have successfully increased net rents back to their September 2008 levels through a combination of increasing street rents and managing promotions to new customers, coupled with existing customer rent increases. At 31 March 2010, the net rent for the Group's wholly owned stores was £26.85 per sq ft, an increase of 5% on the level at 31 March 2009 and 6% up from the April 2009 low.

The average net rental achieved last year across the 51 wholly owned stores was £26.31 per sq ft per annum (the average rent in London is higher at £28.48 per sq ft per annum). The stores in lease-up achieved a higher average rental (£26.97 per sq ft) than the 32 same stores (£26.12 per sq ft), reflecting the greater London weighting of the lease-up stores.

Store Operations

The Big Yellow store model is now well established. The "typical" store has 60,000 sq ft of net lettable storage area and takes some 3 to 5 years to achieve 85% occupancy. Some stores may take longer than this given they opened shortly prior to the downturn. The average room size is 60 sq ft.

The store is initially run by three staff, adding a part time member of staff once the store occupancy justifies the need for the extra administrative and sales workload. Given that the operating costs of these assets are relatively fixed, larger stores in bigger urban conurbations, particularly London, drive higher revenues and higher operating margins.

The drive to improve store operating standards and consistency across the portfolio remains a key focus for the Group. Excellent customer service is at the heart of our business objectives, as a satisfied customer is our best marketing tool. We measure customer service standards through a programme of mystery shoppers and ex-customer surveys and have introduced online customer reviews during the year. We have in place a team of Area Managers who have on average been with Big Yellow for seven years. They develop and support the stores to drive the growth of the business. Adrian Lee, Operations Director, is the Board member responsible for dealing with all customer issues.

The store bonus structure rewards occupancy growth, sales growth and cost control through setting quarterly targets based on occupancy and store profitability, including the contribution from ancillary sales of insurance and packing materials. Information on bonus build up is circulated monthly and stores are consulted in preparing their own targets and budgets each quarter, leading to improved visibility, a better understanding of sales lines and control of operating costs.

We believe that as a customer-facing real estate business it is paramount to maintain the quality of our estate and customer offering. We therefore continue to invest in a rolling programme of store makeovers, preventative maintenance, store cleaning and the repair and replacement of essential equipment, such as lifts and gates. The ongoing annual expenditure is approximately £30,000 per store, which is included within the income statement in cost of sales. This excludes makeovers which typically take place every three years at a cost of approximately £15,000 to £20,000.

We have continued to manage the ten freehold stores for HSBC Bank plc branded as Armadillo Self Storage. We have moved the stores onto our centralised systems and trained the staff on our way of working. During the year we have rebranded all of the stores with a new Armadillo Self Storage livery and integrated the stores onto our website. We continue to explore opportunities with HSBC to develop further the Armadillo brand.

Sales and Marketing

This year our strategy has focussed on leveraging the Big Yellow brand. We have maintained our position as the clear brand and online leader in the UK self storage industry, with awareness levels three times that of our nearest competitor. Once again we have demonstrated the power of our brand to win business.

Online innovation

Building on the success of our new website, we have improved our online services, launching innovations which are currently unique to Big Yellow within the UK industry. We are constantly looking to improve our
e-commerce proposition and we will continue to lead the industry in this area.

Check in online

Customers can now get a quote, reserve a room and check in online. Similar to systems in the airline industry, this system has the double benefit of improving the user experience, and reducing move-in time by some 30%, and therefore making our operations more efficient.

Online Customer Reviews

Consistent with our strategy of putting the customer at the heart of our business, we have launched an online customer review system which well known retail brands such as Amazon and e-Bay have made familiar to
online users.

This gives us real time feedback from customers and is published on our website by an independent moderator. It gives us clear insights as to how we are delivering the experience that our customers demand. Reviews are not edited or filtered based on the scores they award, and they prove that we are consistently delivering a very high standard of service:

· over 2,500 reviews have been published

· over 50% of reviews awarded an overall score of 5 stars out of 5

· our average score across the board is 4.6 out of 5

· our average customer service score is 4.6 out of 5

Our customers are our most powerful marketing asset, and this system gives us a digital platform to communicate positive "word of mouth" to prospective customers.

Search engines and social media

Search engines continue to be fundamental to our strategy, generating 80% of our online prospects.

Our strategy is to engage fully with new media, seeing them as complementary to our existing marketing channels, as opposed to replacements for them. Social media will continue to be an important part of our marketing mix, providing us with new ways of engaging with our target audiences and gathering customer feedback.

Sales Promotions

This year we have simplified our sales proposition, with one offer across all stores of "50% off for up to your first 8 weeks". We have also given more emphasis to our Price Promise on our website and in our stores to ensure we are communicating the best value for our customers.

Local marketing, selling standards and customer service at store level are also critical to building the brand and achieving customer loyalty and recommendations. We invest significantly in training and have a reward structure and performance monitoring systems which focus specifically on achieving sales and customer service objectives.

Brand awareness

Highlights from this year's awareness survey include:

· our brand awareness is still three times the level of our nearest competitor

· we have maintained brand awareness of 80% in London

· Big Yellow leads the industry in terms of brand preference, with more prospective customers expecting to use Big Yellow than any other brand

Source: YouGov, September 2009

Budget

During the year the Group spent approximately £2.6 million (4.5% of revenue) on marketing, in line with the previous year. It is our intention to continue to invest 4.25% to 4.5% of our revenue to increase awareness of Big Yellow in existing and new markets, particularly as we expand into new cities across the country.

People

At Big Yellow we aim to provide a lively, fun and enjoyable working environment, without losing our commitment to delivering the very best standards of customer service.

We encourage a culture of partnership within the business and believe in staff participating in corporate performance through bonus schemes and share incentives. Many employees benefit from an HMRC approved Sharesave Scheme, which provides an opportunity to invest in the future success of Big Yellow at a discount to the prevailing share price at the date of each invitation. Our stakeholder pension scheme has been taken up by over two thirds of employees eligible to join and a voucher awards scheme is used extensively across the business to recognise and reward our staff's efforts and achievements.

We aim to promote employee wellbeing through a range of flexible working options to include flexitime, staggered hours, home working and sabbaticals. We provide a comprehensive range of medical support and advice though our occupational health providers and have arranged corporate gym membership on a national basis.

We continue to recognise the importance of communication and consultation with an annual spring conference, regular formal and informal meetings and bi-monthly newsletters and operational updates. In addition, the Directors and senior management spend significant time in the stores and are accessible to employees at all levels. An annual Employee Attitude Survey provides management with key feedback and guidance as to where to focus their attention to further improve the working environment.

We had 287 full-time, part-time and casual employees in the business at the year end (2009: 273 employees), and recruiting and retaining the right calibre people remains critical to the continued success of the Company.

We promote the individual development of staff through training and regular performance appraisals and delivered just over 600 days training to employees in the last year, equating to an average of approximately 2.5 days training per employee. In the stores, nearly two thirds of the managerial posts have been filled by internal promotions.

In March of this year, we were delighted to have achieved 25th position in the Sunday Times 100 Best Companies To Work for 2010 and also to have achieved Two Star Status for the Best Companies Accreditation. The results of this survey are testament to the Group not just talking about our work environment, but also actively doing something about it.

Property

We have not acquired any new sites during the year; focussing on obtaining planning consents and building out selected sites within our development pipeline, and conserving available liquidity within the business. We believe the continuing difficulties in the banking and capital markets make access to capital required to fund growth more difficult and will slow down the growth in self storage store openings in the market generally. We believe that we are in a relatively strong position with our freehold property assets, with the proven ability to access more funding when the opportunity presents itself.

We now have a portfolio of 70 stores and sites of which 60 are currently open and a further 9 have planning consents.

Our Reading store achieved the highest 'Excellent' rating on the Building Research Establishment's Environmental Assessment Methodology ("BREEAM"), in the industrial buildings category, following our store in Sheen achieving the same rating last year. Our store at Twickenham which opened in May 2009 achieved an A+ rating on carbon emissions, indicating that it has net zero CO2 emissions.

Development Pipeline

There are a further 10 freehold sites (including three sites within Big Yellow Limited Partnership) to be developed into new Big Yellow self storage facilities. These sites are at various stages of planning and construction which, when fully developed, will increase the total capacity of the portfolio to 4.4 million sq ft. The development pipeline is summarised in the table below:

Wholly owned sites	Location	Status	Anticipated capacity
Chiswick, West London	On the A4, high visibility from M4 flyover, currently occupied by Sotheby's	Consent for redevelopment as purpose built store granted	75,000 sq ft
Eltham, South East London	Junction of A20 and A205, on busy South Circular roundabout	Under construction, opening March 2011	70,000 sq ft
Enfield, North London	Prominent site on the A10 Great Cambridge Road, London	Consent granted	60,000 sq ft
Guildford Central	Prime location in centre of Guildford on Woodbridge Meadows	Consent granted	56,000 sq ft
Gypsy Corner, West London	Highly visible site on A40 in Acton, West London	Consent granted	70,000 sq ft
Manchester Central	Prime location on Water Street in central Manchester	Planning under negotiation	70,000 sq ft
New Cross, South East London	Prominent location on Lewisham Way (A20), London	Consent granted, development committed with planned opening in early 2012	60,000 sq ft
Sites within BYLP
Camberley	Prominent location on A30 London Road, Surrey	Under construction, opening January 2011	65,000 sq ft
High Wycombe	Prominent location on A40 London Road, Buckinghamshire	Under construction, opening June 2010	53,000 sq ft
Stockport	Prominent location visible from M60, Greater Manchester	Consent granted	60,000 sq ft

We expect to open three stores in the current financial year, one within the wholly owned Group (Eltham), and two within the Partnership (High Wycombe and Camberley).

The Group manages the construction and fit-out of its stores in-house, as we believe it provides both better control and quality, and we have an excellent record of building stores on time and within budget. The total construction spend in the year (including in the Partnership) was £26 million. We are currently on site at the three stores that will open in the financial year.

Risk Management

The management of risk is a fundamental part of how we have controlled the development of Big Yellow since its formation in September 1998, and the opening of our first purpose built store in Richmond, London in May 1999. The principal areas of risk that the Group faces are considered below.

Self Storage Market Risk

The UK economy has begun to edge out of recession following GDP growth of 0.4% in the fourth quarter of 2009. The demand for self storage has slowed since the liquidity crisis in August 2007, however we believe that the structural need for self storage remains, and we are pleased at the relative resilience that has been shown to date by the sector, with a gradual pick up of demand.

Of the customers moving into the business in the last year, our surveys indicate approximately 57% are in some way linked to the housing market, of which 22% are customers renting storage space whilst moving within the rental sector, and 35% moving within the owner occupied sector. We have seen a small recovery in demand during the year from customers within the owner occupied sector, consistent with the slowly improving picture for mortgage approvals and housing transactions. During the last year 10% of our customers who moved in took storage space as a spare room for lifestyle purposes and approximately 23% of our customers used the product because some event has occurred in their lives generating the need for storage; they may be moving abroad for a job, have inherited furniture, are getting married or divorced, are students who need storage during the holidays, or homeowners developing into their lofts or basements.

The balance of 10% of our customer demand in the year came from businesses ranging from start ups and market traders to retailers and larger multinationals. These businesses store stock, documents, equipment, or promotional materials all requiring a convenient flexible solution to their storage, either to get started or to free up more expensive space. The demand from business customers, who typically occupy larger rooms, has been relatively robust, as they seek a cost effective, flexible solution to their storage requirements, preferring self storage to the commitment of a long lease.

Business customers typically stay longer than domestic customers, and will also on average occupy larger rooms. Whilst only representing 10% of new customers during the year, businesses represent 20% of our overall customer base, occupying 33% of the space in our stores. The average room size occupied by business customers is 101 sq ft, against 51 sq ft for domestic customers.

Our business customers range across a number of industry types, such as retailers, professional service companies, hospitality companies and importers/exporters.

Self storage is a relatively immature market in the UK compared to other self storage markets such as the United States and Australia, and we believe has further opportunity for growth. Awareness of self storage and how it can be used by domestic and business customers is relatively low throughout the UK, although higher in London. The rate of growth of branded self storage on main roads in good locations has historically been limited by the difficulty of acquiring sites at affordable prices and obtaining planning consent. The lack of availability of credit within the economy has further reduced this rate of growth since the liquidity crisis in 2007.

Big Yellow only invests in prime storage locations, developing high quality self storage centres in the large urban conurbations where the drivers in the self storage market are at their strongest and the barriers to competition are at their highest. We have focussed the business on London, where we believe the drivers and resilience for the product is strongest.

We have a large current storage customer base of approximately 30,500 spread across the portfolio of open stores and many thousands more who have used Big Yellow over the years. In any month, customers move in and out at the margin resulting in changes in occupancy. Despite the current environment, this has remained a seasonal business and typically one sees growth over the spring and the summer months, with the seasonally weaker periods being the winter months. The table below illustrates the seasonality of the business with move-ins to the portfolio of wholly owned stores that were open at 1 April 2009. Twickenham opened in May 2009.

Move-ins	Year ended 31 March 2010	Year ended 31 March 2009
April to June	9,357	9,413	(1%)
July to September	9,919	9,289	7%
October to December	8,042	7,493	7%
January to March	8,279	6,962	19%
Total	35,597	33,157	7%

This also illustrates the year on year activity level improvement in the current year for the last three quarters. The performance in terms of occupancy, revenue and EBITDA of our stores can be seen from the Portfolio Summary.

The average length of stay in Big Yellow's stores is also increasing. At 31 March 2010 the average length of stay for existing customers was 18.6 months; an increase from 18.0 months in the prior year. For all customers, including those who have moved out of the business, the average length of stay has increased from 8.4 months to 8.5 months. This translates into a loyal customer base. In our 32 same store portfolio, 40% of our customers have been storing with us for over three years. A further 17% in these stores have been in the business for between one and three years.

That said, we have seen a small decline in the financial year of the length of stay of customers who moved out during the year. This fell to 8.1 months from 8.6 months in 2009, albeit that was a sizeable increase from 7.4 months in 2008. This is consistent with the improving demand from customers using the product for relatively short periods of time, linked in the main to house moves and home improvements.

Property Risk

Big Yellow's management has significant experience in the property industry generated over many years and in particular in acquiring property on main roads in high profile locations and obtaining planning consents.

We do take planning risk where necessary, although the more distressed property market will in our view provide more opportunity to buy sites on a conditional basis. The planning process remains difficult with some planning consents taking in excess of twelve months to achieve, although given we have planning consent on all bar one site, the risk to the Group has reduced significantly from prior years.

We manage the construction of our properties very tightly. The building of each site is handled through a design and build contract, with the fit out project managed in-house using an established professional team of external advisors and sub-contractors who have worked with us for many years to our Big Yellow specification.

Treasury Risk

The Group borrows in sterling at floating rates of interest and uses swaps to hedge its interest rate exposure. The Group has derivatives in place to ensure at least 50% of our bank borrowings are hedged, the balance is left floating paying margin over LIBOR. At 31 March 2010, we had fixed rate swaps in place over 63% of our outstanding bank borrowings, including hedging of at least 70% of the investment tranche of our senior debt facility, as required by our loan documentation. The hedging expires in September 2015, two years beyond the expiry of the facility, thus providing interest rate risk mitigation when the facility is refinanced. The Group does not hedge account its interest rate derivatives, all movements in fair value are taken through the income statement.

The Group monitors compliance with its banking covenants closely. During the year it complied with all its covenants, and is forecast to do so for the foreseeable future.

Our portfolio is relatively high yielding and we believe a flexible approach to our hedging is appropriate for our strategic aims, given our conservative balance sheet.

Interest Cover and Balance Sheet Risk

The Group reviews its current and forecast projections of cash flow, borrowing and interest cover as part of its monthly management accounts. In addition, an analysis of the impact of significant transactions is carried out regularly, as well as a sensitivity analysis assuming movements in interest rates and occupancy in the stores on gearing and interest cover.

Credit Risk

Our customers are required to pay a deposit when they start to rent a self storage room and are also required to pay in advance for their four-weekly storage charges. The Group is therefore not exposed to a significant credit risk. 74% of our current customers pay by direct debit; however of new customers moving into the business in the last year 83% have paid by direct debit. Businesses often prefer to pay by cheque or BACS. During the recession, we did not see an increase in the levels of bad debts and arrears. Our bad debt expense represents 0.17% of revenue in the year (2009: 0.17% of revenue).

Taxation Risk

The Group is exposed to changes in the tax regime affecting the cost of corporation tax, VAT and Stamp Duty Land Tax ("SDLT"). We regularly monitor proposed and actual changes in legislation with the help of our professional advisors, through direct liaison with HMRC, and through trade bodies to understand and, if possible, mitigate or benefit from their impact.

Real Estate Investment Trust ("REIT") Risk

The Group converted to a REIT with effect from 15 January 2007. The Group is therefore exposed to potential tax penalties or loss of its REIT status by failing to comply with the REIT legislation. The Group has internal monitoring procedures in place to ensure that the appropriate rules and legislation are complied with. To date all REIT regulations have been complied with.

Human Resources Risk

At Big Yellow we have developed a professional, lively and enjoyable working environment and believe our success stems from attracting and retaining the right people. We encourage all our staff to build on their skills through appropriate training and regular performance reviews. We believe in an accessible and open culture and everyone at all levels is encouraged to review and challenge accepted norms, so as to contribute to the performance of the Group.

Reputational Risk

Big Yellow's reputation with all its stakeholders is something we value highly and will always look to protect and enhance. We aim to communicate clearly with our customers, suppliers, local authorities and communities, employees and shareholders and to listen to and take account of their views. Big Yellow's intranet and website (bigyellow.co.uk) are important avenues of communication for both employees and shareholders.

Security Risk

The safety and security of our customers and stores remains a key priority. To achieve this we invest in state of the art access control systems, individual room alarms, digital CCTV systems, intruder and fire alarm systems and the remote monitoring of all our stores out of our trading hours.

We have implemented customer security procedures in line with advice from the Police and continue to work with the regulatory authorities on issues of security, reviewing our operational procedures regularly. The importance of security and the need for vigilance is communicated to all store staff and reinforced through training and routine operational procedures. We have continued to run courses for all our staff to enhance the awareness and effectiveness of our procedures in relation to security.

Corporate Social Responsibility

The Board employs a Corporate Social Responsibility Manager, who reports to the Board through the Operations Director. We remain committed to our formal corporate social responsibility ("CSR") policy. This is shown below.

Corporate Social Responsibility Policy

The Board recognises that high levels of corporate social responsibility ("CSR") linked to clear commercial objectives, will create a more sustainable business and increase shareholder and customer value. This Policy will cover all of Big Yellow's operations, as both a self storage developer and operator. Big Yellow is seeking to meet the demand for self storage from businesses and private individuals providing the storage space for their commercial and / or domestic needs, whilst aiding local employment creation and contributing to local community regeneration.

The Board commits itself to:

· complying with relevant social and environmental legislation

· establishing a formal integrated CSR management structure to implement "best practice"

· preventing pollution and the waste of resources to protect the environment

· consulting with stakeholders on social aspects to improve their services to the Group

· providing capital for sustainable development that is economically viable

· reporting annually on improving ethical, community and environmental performance

Operationally, Big Yellow commits to:

· Development - to address relevant issues on local community and climate change aiming to achieve best practice on sustainability checklists and local planning guidance

· Design - to minimise its carbon footprint as far as practicable through the application of passive building principles, viable renewable energy and other sustainability criteria

· Construction - to aim for build site sustainable practices by raising environmental and health and safety standards through the Considerate Constructors Scheme

· Estates and Facilities - to monitor energy, waste and water provider performance in order to identify areas for operational efficiency improvements

· Operations - to keep store managers and customers informed of the ethical, safety, security, energy use and waste minimisation aspects of storage and packaging

· Sales, Marketing and Customer Care - to facilitate external communication of sustainability and ethical market differentiation and improve customer satisfaction

· Human Resources - to integrate the Group CSR policy within all training programmes, employee communications, and benefits initiatives, whilst continuing to promote charitable giving, employment creation and staff retention

· Office Management and Information Technology - to facilitate internal communication of environmental performance and cost effectiveness of energy usage, waste paper reduction, recycled paper usage, and the recycling of waste paper

The CSR Manager will facilitate the Board and Group Operations to achieve these commitments by establishing more specific objectives within the existing management structure and implementing guidance to meet agreed continuous improvement targets. The CSR Manager is also responsible for recording key performance indicators for annual reporting and review by the Board.

Financial Review

Financial Results

Revenue for the year was £58.0 million, a fall of £0.5 million from £58.5 million for 2009. £0.4 million of this decline was due to a fall in tenant related income on sites where we have obtained vacant possession prior to the commencement of development of a new Big Yellow store. Other sales (included within the above), comprising the selling of packing materials, insurance and storage related charges represented 18% of storage income for the year (2009: 17%) and generated revenue of £8.3 million for the year, up 4% from £8.0 million in 2009.

Storage revenue for the fourth quarter increased by 5% to £13.7 million from £13.0 million for the same quarter last year. Encouragingly, storage revenue in the seasonally weaker second half of the year was £27.7 million, up 1% from £27.4 million for the first half of the year, and up 3% from £26.8 million for the second half of the year ended 31 March 2009. Annualised store revenue at 31 March 2010 was £56.0 million, an increase of 8% from 31 March 2009.

Total revenue for the fourth quarter was £14.3 million, up 3% from the same quarter last year; the increase not as marked as for storage revenue principally due to a fall in construction management fees earned from the Partnership on the same quarter last year.

The EBITDA margin for the 32 same stores was 64% (2009: 65%). There was a reduction in revenue of 7% for the 32 same stores, however the effect of this on the margin was partially offset by a reduction in same store operating costs of 7%. The table below illustrates the performance of the 32 same stores and the lease-up stores during the year.

Wholly owned store performance	Capacity	Occupancy		Revenue		EBITDA
	000 sq ft	31 Mar10 000 sq ft	31 Mar 09 000 sq ft	31 Mar 10 £000	31 Mar 09 £000	31 Mar 10 £000	31 Mar 09 £000
32 same store portfolio	1,942	1,350	1,379	41,346	44,555	26,649	28,887
15 lease-up stores opened pre 1 April 2008	1,008	377	329	11,787	10,238	6,037	4,175
4 lease-up stores opened post 1 April 2008	277	71	24	2,001	473	62	(107)
Total	3,227	1,798	1,732	55,134	55,266	32,748	32,955

Of the 15 lease-up stores which opened pre 1 April 2008, three stores opened before 31 March 2006, six stores opened in the year ended 31 March 2007 and six stores opened in the year ended 31 March 2008.

The Group made a profit before tax in the year of £10.2 million, a significant improvement from a loss of £71.5 million in the prior year. This improvement in Group profitability reflects the increase in the valuation of the Group's open stores coupled with the improved recurring profit offset by the write down of assets in the course of development.

After adjusting for the loss on the revaluation of investment properties and other matters shown in the table below the Group made an adjusted profit before tax in the year of £16.5 million, up 20% from £13.8 million in 2009.

Profit/(loss) before tax analysis	2010 £m	2009 £m
Profit/(loss) before tax	10.2	(71.5)
Loss on revaluation of investment properties	3.6	52.8
Movement in fair value on interest rate derivatives	2.7	18.0
Net losses on non-current assets/surplus land	2.0	11.6
Refinancing costs	-	1.3
Share of non-recurring (gains)/losses in associate	(2.0)	1.6
Adjusted profit before tax	16.5	13.8

The movement in the adjusted profit before tax in the year is illustrated in the table below:

	2009 £m
Adjusted profit before tax - March 2009	13.8
Reduction in gross profit	(0.8)
Increase in administrative expenses (non-cash IFRS 2 charge)	(1.1)
Reduction in interest payable	6.9
Reduction in capitalised interest	(1.7)
Increase in share of recurring loss in BYLP	(0.6)
Adjusted profit before tax - March 2010	16.5

Basic earnings per share for the year were 8.11p (2009 loss per share: 62.86p) and fully diluted earnings per share were 8.03p (2009 loss per share: 62.34p). Adjusted earnings per share based on adjusted profit after tax was up 9% to 12.99p (2009: 11.89p) (see note 12).

Expenses

Administrative expenses were £6.9 million compared to £5.8 million in 2009. This increase is due to a £1.1 million increase in the non-cash IFRS 2 charge, principally arising from the Long Term Bonus Performance Plan approved at the Group's AGM in July 2009. Cash administrative expenses have been held to the same level as last year.

We have implemented tight cost control in the Group. Salaries for all staff were frozen for the year ended 31 March 2010, and we have sought to reduce cost in the Group where possible. This is evidenced by the decline in same store operating costs highlighted above. In line with the improved performance in the second half of the year, the bonus payout at the store level and at head office has increased in 2010 compared to 2009.

Interest Expense on Bank Borrowings

The gross bank interest expense for the year reduced significantly to £11.4 million from £18.1 million in 2009 reflecting the restructuring of our hedging arrangements carried out in March 2009. The average cost of borrowing during the year was 3.6% against 5.9% in the prior year.

Interest payable has decreased in the income statement from £17.5 million to £12.3 million following the reduction in average interest payable, offset by a lower level of capitalised interest in the year. Fewer sites were under development in the year compared to the prior year, resulting in capitalised interest falling from £1.9 million to £0.3 million.

In March 2010, the Group spent £245,000 extending the expiry of its £70 million interest rate swap from September 2013 to September 2015. In March 2009 the Group settled its outstanding derivative positions at a cost of £14.9 million. Both of these costs are included in the income statement in the relevant year, but are added back in the adjusted profit before tax calculation.

REIT Status

The Group converted to a Real Estate Investment Trust ("REIT") on 15 January 2007. Since then the Group has benefited from a zero tax rate on the Group's qualifying self storage earnings. The Group only pays tax on the profits attributable to our residual business, comprising primarily of the sale of packing materials and insurance, and fees earned from Big Yellow Limited Partnership, from the management of the Armadillo portfolio.

REIT status gives the Group exemption from UK corporation tax on profits and gains from its qualifying portfolio of UK stores. Future revaluation gains on these developments and our existing open stores will be exempt from corporation tax on capital gains, provided certain criteria are met.

The Group has a rigorous internal system in place for monitoring compliance with criteria set out in the REIT regulations. On a monthly basis, a report to the Board on compliance with these criteria is carried out. To date, the Group has complied with all REIT regulations, including forward looking tests.

Taxation

There is no cash tax payable for the year. There is no tax charge for the year ended 31 March 2010 (2009: £1,150,000).

Dividends

REIT regulatory requirements determine the level of Property Income Dividend ("PID") payable by the Group. On the basis of the full year distributable reserves for PID purposes, no PID is payable due to the level of shadow capital allowances available to the Group, coupled with brought forward notional losses in the tax exempt business (31 March 2009: nil PID).

The Board is recommending the payment of a final discretionary ordinary dividend of 4 pence per share. There was no interim dividend, so this is the total dividend for the year. Subject to approval by shareholders at the Annual General Meeting to be held on 5 July 2010, the final dividend will be paid on 14 July 2010 to shareholders on the Register on 11 June 2010.

Financing and Treasury

The Group is strongly cash generative operationally and draws down from its longer term committed facilities as required to meet obligations.

A summary of the cash flow for the year is set out in the table below:

	Year ended 31 March 2010 £000	Year ended 31 March 2009 £000

Cash flow from operations	31,271	32,074
Finance costs (net)	(12,208)	(21,871)
Free cash flow pre non-recurring items within finance costs	19,063	10,203
Non-recurring items paid within finance costs	-	(16,239)

Free cash flow	19,063	(6,036)
Capital expenditure	(14,388)	(34,553)
Asset sales	1,927	26,603
Investment in associate	(1,500)	(5,429)
Cash flow after investing activities	5,102	(19,415)

Ordinary dividends	-	(6,309)
REIT conversion charge paid	-	(90)
Issue of share capital	33,634	26
(Decrease)/increase in borrowings (net)	(11,339)	27,339

Net cash inflow	27,397	1,551

Opening cash and cash equivalents	3,222	1,671
Closing cash and cash equivalents	30,619	3,222

Free cash flow pre capital expenditure increased to £19.1 million for the year (2009: outflow of £6.0 million). In the year capital expenditure outflows were £14.4 million, down from £34.6 million in the prior year. The cash flow after investing activities was a net inflow of £5.1 million in the year, compared to an outflow of £19.4 million in 2009, demonstrating the cash conservation in the Group within the year.

Balance Sheet

The Group's 51 wholly owned stores and seven stores under development at 31 March 2010, which are classified as investment properties, have been revalued by Cushman & Wakefield ("C&W") and this has resulted in an investment property asset value of £795.6 million, comprising £710.4 million (89.3%) for the 44 freehold (including one long leasehold) open stores, £51.2 million (6.4%) for the seven short leasehold open stores and £34.0 million (4.3%) for investment properties under construction.

Property

Analysis of property portfolio	No of locations	Value at 31 March 2010 £m	Revaluation movement in year £m
Investment property	51	761.6	9.7
Investment property under construction	7	34.0	(13.3)
Investment property total	58	795.6	(3.6)
Surplus land	7	20.2	(2.0)
Total	65	815.8	(5.6)

Investment property

The value of the investment property portfolio at 31 March 2010 was £761.6 million, up £26.5 million from £735.1 million at 31 March 2009. The increase in valuation of the 50 stores open at 31 March 2009 is £11.3 million, representing a 1.5% total increase, of which we estimate 0.8% is a function of capital improvement with the balance of 0.7% increase due to operational performance. The balance of £15.2 million is the valuation of our Twickenham store which opened in May.

The revaluation gain on 44 freehold stores was £14.3 million, with the seven short leasehold stores showing a revaluation deficit of £4.6 million. This illustrates that our freehold bias is well placed and will drive greater returns for shareholders.

Each store is reviewed and valued individually by Cushman & Wakefield LLP, who are the valuers to a significant proportion of the UK and European self storage market. There has been a slight improvement in capitalisation rates of 12 bps, coupled with improvements in operating performance albeit there has been a reduction in the stabilised occupancy levels of certain stores. It should be noted that there have been three transactions in the year in the secondary self storage space only.

The valuation included in the accounts assumes rental growth in future periods, as described in note 14. If an assumption of no rental growth is applied to the external valuation, the stabilised yield pre administration expenses is 8.44% (March 2009: 8.55%). This is based on an average occupancy over the 10 year cash flow period of 78.2% across the whole portfolio. The mature occupancy assumed is 84.2%, achieved on average in 42 months from 31 March 2010.

Investment property under construction

The Group adopted compulsory amendments to IAS 40, Investment Property, during the year. These changes require investment property under construction to be valued, rather than carried at the lower of cost and value in use, as had been the case when they were accounted for under IAS 16. In accordance with IAS 40 the prior year comparatives have not been restated to reflect this change in accounting policy. C&W have therefore valued seven wholly owned sites (six with planning consent), and three within Big Yellow Limited Partnership (all with planning consents), in addition to the open store portfolio.

In the past, where the Group had assets in the course of construction, these had been held at cost, and an assessment made of the anticipated surplus to be achieved on the opening and leasing up of a Big Yellow self storage facility within the branded portfolio. If this supported the existing book cost, taking account of projected costs to complete, no provision was made against the cost. The external valuation takes a different approach, and in effect is assuming a sale to a third party of an asset in the course of construction, assuming contingencies on construction costs, assessment of alternative use where planning risk remains and a level of developer's profit. An external valuation also has to consider market evidence, which is clearly limited in the current economic climate.

As a result, and given this is the first time this standard has been applied by the Group in its annual results, we have booked a deficit of £13.3 million against the Group assets, and have included a £0.2 million deficit as our share in Big Yellow Limited Partnership. It should be noted that C&W's forecast valuations for when the assets have reached stabilised occupancy, including assumptions in relation to revenue and operating cost growth within these assets, currently point to a revaluation surplus on total development cost of £99 million (118%) on the seven wholly owned development sites and £26 million (105%) on the three sites within Big Yellow Limited Partnership.

In their report to us, our valuers, Cushman & Wakefield, have drawn attention to valuation uncertainty resulting from exceptional volatility in the financial markets and a lack of transactions in the property investment market. Please see note 14 for further details.

Surplus land

These sites are those which the Directors do not intend to develop into self storage centres. The sites are held at the lower of cost and net realisable value and have not been externally valued. The Directors have assessed the carrying value of these sites. In the prior year, a provision of £11.6 million was made against these sites, representing approximately a third of the cost of the land. The Directors have made a further provision in the current year of £2.0 million against a site where the planning outcome is currently uncertain.

Purchasers' cost adjustment

As in prior years, we have instructed an alternative valuation on our assets using a purchaser's cost assumption of 2.75% (see note 14 for further details) to be used in the calculation of our adjusted diluted net asset value. This Red Book valuation on the basis of 2.75% purchaser's costs, results in a higher property valuation at 31 March 2010 of £831.2 million (£37.1 million higher (including £1.5 million for the share of the uplift in Big Yellow Limited Partnership) than the value recorded in the financial statements or 28.3 pence per share).

The revised valuation translates into an adjusted net asset value per share of 453.3 pence (2009: 440.7 pence) after the dilutive effect of outstanding share options. The prior year comparatives have been adjusted to reflect the placing which took place in May 2009.

Movement in adjusted NAV

The year on year movement is illustrated in the table below:

Movement in adjusted net asset value	Equity shareholders' funds	EPRA adjusted NAV per share
1 April 2009	543,816	457.0
Equity raising	31,534	(16.3)

1 April 2009 (proforma)	575,350	440.7
Revaluation movements (including share of BYLP)	(1,522)	(1.2)
Movement in purchasers' cost adjustment	4,467	3.4
Adjusted profit	16,514	12.6
Other movements (eg share options)	(1,053)	(2.2)

31 March 2010	593,756	453.3

Borrowings

We focus on improving our cash flows and we currently have healthy Group interest cover of 2.7 times based on Group EBITDA against existing interest costs, allied to a relatively conservative debt structure secured principally against the freehold estate.

The Group has a £325 million senior debt facility arranged by HSH Nordbank AG. During the year, Lloyds TSB Bank plc took a participation of £100 million in the facility, with HSBC Bank plc taking an initial participation of £25 million. The bank loan is secured on 51 of the Group's properties. The loan is due to expire on 15 September 2013.

The facility is divided into two tranches, Tranche A, up to a maximum of £50 million is used to finance non-stabilised properties within the Group and carries a margin of 150 bps. Tranche B is used to finance stabilised Group properties, and carries a margin of between 112.5 bps and 150 bps dependent on the Tranche B income cover. The Group is currently paying a margin of 112.5 bps on this Tranche. As the properties within Tranche A stabilise they may be transferred to Tranche B, reducing the margin payable. There is no loan to value covenant on the facility.

Certain of the covenants of the core facility were amended during the year (at no cost to the Group) to give the Group more financial flexibility and to facilitate the syndication. The Group was comfortably in compliance with these revised covenants at 31 March 2010, as illustrated in the table below.

	Previous covenant	Revised Covenant	At 31 March 2010
Minimum income cover on Tranche B properties*	1.25x	1.4x	3.75x
Minimum net assets	£350 million	£250 million	£547.3 million
Maximum gross loan to net assets gearing	1:1	1.3:1	0.55:1

* The income cover covenant rises to 1.5x from September 2011, as per the original agreement, and there has been no change in this covenant.

At the end of the year, the Group had net debt of £269.4 million, a reduction of £38.7 million over last year following £14.4 million of capital expenditure, £1.5 million equity contribution to the Partnership and £12.2 million of net interest paid (including finance lease costs), offset by operating cash flow of £31.3 million, land disposal proceeds of £1.9 million, and £33.6 million from the issue of shares (£31.5 million of which was the net proceeds of the placing).

The Group has £55.6 million of cash and undrawn bank facilities and relatively conservative levels of gearing. The Group currently has a net debt to gross property assets ratio of 33%, and a net debt to adjusted net assets ratio of 45%.

£190 million of the Group's debt is hedged by way of interest rate swaps to September 2015, two years beyond the expiry of the current debt facility. £120 million of this is fixed at 2.99% (including margin). The remaining £70 million is fixed at 3.93% (excluding margin); the expiry of this swap was extended from 2013 to 2015 in the year following a payment of £0.2 million, whilst maintaining the rate payable. At 31 March 2010 we had floating rate debt of £110 million, on which we are paying one month LIBOR plus applicable margin. The interest rate profile of the Group's debt is shown in the table below.

	Amount of debt 2010	Weighted average interest cost at 31 March 2010	Weighted average interest cost at 31 March 2009

Fixed rate debt	£190 million	4.5%	4.5%
Variable rate debt	£110 million	1.7%	2.3%
Total debt	£300 million	3.5%	3.7%

At 31 March 2010, the fair value on the Group's interest rate derivatives was a liability of £8.0 million; a loss of £2.4 million has been charged to the income statement to reflect the movement from the prior year. The income statement charge also includes the payment made to extend the swap referred to above. The Group does not hedge account its interest rate derivatives. As recommended by EPRA (European Public Real Estate Association), the fair value movements are eliminated from adjusted profit before tax, adjusted earnings per share, and adjusted net assets per share.

Treasury continues to be closely monitored and its policy approved by the Board. We maintain a keen watch on medium and long term rates and the Group's policy in respect of interest rates is to maintain a balance between flexibility and hedging of interest rate risk.

Cash deposits are only placed with approved financial institutions in accordance with the Group's policy.

Share Capital

In May 2009, the Company issued 11,549,000 shares by way of a placing at £2.85, which represented a 6% premium to the previous day's closing share price.

The share capital of the Company totalled £13.1 million at 31 March 2010 (2009: £11.6 million), consisting of 130,990,837 ordinary shares of 10p each (2009: 115,592,541 shares).

Shares issued for the exercise of options during the period amounted to 2,759,296 at an average exercise price of 77p.

The Group holds 1,905,000 of its shares within an Employee Benefit Trust ("EBT"). 100,000 shares were transferred from Treasury during the year to the EBT, and a further 1,090,000 shares were issued to the EBT. The transfer and the issuance was to enable options to be granted in respect of the Group's Long Term Bonus Performance Plan. These shares are shown as a debit in reserves and are not included in calculating net asset value per share.

	2010 No.	2009 No.

Opening shares	115,592,541	115,514,119
Shares issued in placing	11,549,000	-
Shares issued to EBT	1,090,000	-
Shares issued for the exercise of options	2,759,296	78,422

Closing shares in issue	130,990,837	115,592,541
Shares held in EBT and Treasury	(1,905,000)	(815,000)

Closing shares for NAV purposes	129,085,837	114,777,541

113,703,496 shares were traded in the market during the year ended 31 March 2010 (2009: 128,892,785). The average mid market price of shares traded during the year was 344.8p with a high of 437.5p and a low of 201.3p.

At 31 March 2010 there were 107,502 shares subject to share option awards to employees of the Group at a weighted average strike price of 94p. In addition there are 1,488,780 nil paid options, granted under the Group's LTIP scheme and 304,175 share options granted under the Group's SAYE scheme at a weighted average strike price of 166p.

Big Yellow Limited Partnership

Big Yellow Limited Partnership, a joint venture with Pramerica Real Estate Investors Limited, owns self storage centres and development sites in the Midlands, the North, Scotland and four southern towns. In the consolidated accounts of Big Yellow Group PLC, the Partnership is treated as an associate. We have adopted equity accounting for the Partnership, so that our share of the Partnership's results are disclosed in operating profit and our net investment is shown in the balance sheet within "Investment in Associate". We have provided in note 13e the balance sheet and income statement of the Partnership, along with the Group's share of the income statement captions.

The table below shows the split of stores and development sites between the Group and the Partnership.

At 31 March 2010	Big Yellow (wholly owned)	Big Yellow Limited Partnership	Total
No of stores trading	51	9	60
No of stores under development	7*	3	10
Total number of stores and sites	58	12	70

Development sites with planning consent	6	3	9

Open store capacity	3.23 million sq ft	0.56 million sq ft	3.79 million sq ft
Development site capacity	0.46 million sq ft	0.18 million sq ft	0.64 million sq ft
Total planned capacity	3.69 million sq ft	0.74 million sq ft	4.43 million sq ft

* this includes our site in central Manchester which has a sale contract to Big Yellow Limited Partnership, conditional on the building being completed by 31 December 2010. The terms of the contract will not be met by 31 December 2010, therefore the site is being shown as a wholly owned development site.

Structure

The Group and Pramerica have committed equity in a one third, two thirds split respectively. The Board of the Partnership comprises two representatives of both Pramerica and Big Yellow. Pramerica have the casting vote over the approval of the Partnership's annual business plan.

The anticipated remaining capital expenditure on the three stores in the Joint Venture is £16 million, which will be funded through equity from Pramerica Real Estate Investors (20%) and by the Group (10%), with the remaining 70% funded through a committed development finance facility. This will take the number of stores in the Partnership to 12 and the Partners have resolved not to develop any further stores. Our total further commitment required to fund both the outstanding capital expenditure and trading losses to break even is estimated at £3 million.

The Group earns certain property acquisition, planning, construction and operational fees from the Partnership. For the year to 31 March 2010, these fees amounted to £1.2 million (2009: £1.4 million).

Funding

A five year term development loan of £75 million has been secured from the Royal Bank of Scotland plc to further fund the Partnership. £30 million of this loan has been syndicated to HSBC Bank plc and HSH Nordbank AG. £55.1 million of this loan had been drawn at 31 March 2010.

The Partnership's policy is to fix at least 50% of drawn amounts to 30 June 2013 (as required in its facility agreement), and to leave the balance benefiting from the currently low levels of short term interest rates. £29.8 million of the £55.1 million drawn down at 31 March 2010 has been fixed to 30 June 2013 at a weighted average interest cost post margin of 5.67%. The weighted average interest cost of the facility at 31 March 2010 was 4.2% including margin.

Results

For the year ended 31 March 2010, the Partnership made a profit of £4.0 million (2009: loss of £4.8 million), of which Big Yellow's share was £1.3 million (2009: loss of £1.6 million). After adjusting for non-recurring items (revaluation gains of £6.1 million, gain on disposal of surplus land of £0.1 million, and fair value loss on interest rate derivatives of £0.2 million), the Partnership made an adjusted loss of £2.0 million (2009: loss of £0.2 million), of which the Group's share is £0.7 million (2009: share of loss of £0.1 million). The majority of the stores within the Partnership have opened in the past year; operating losses are expected in the early phases of lease-up.

The Partnership is tax transparent, so the limited partners are taxed on any profits.

Big Yellow has an option to purchase the assets contained within the Partnership or the interest in the Partnership which it does not own exercisable from 31 March 2013. On exit whether by way of exercise of the option or a sale to a third party, Big Yellow is entitled to certain promotes, which could result in Big Yellow sharing in the surplus created in the Partnership ahead of its equity participation.

Portfolio Summary

	March 2010 Wholly owned stores ⁽¹⁾	March 2009 Wholly owned stores	March 2010 Big Yellow LP stores ⁽²⁾	March 2009 Big Yellow LP stores

Number of stores	51	50	9	4

As at 31 March 2010
Total capacity (sq ft)	3,227,000	3,152,000	556,000	251,000
Occupied space (sq ft)	1,798,000	1,732,000	117,000	43,000
Percentage occupied	56%	55%	21%	17%
Net rent per sq ft	£26.85	£25.57	£18.99	£16.98
Annualised revenue (£000)	56,000	52,025	2,823	944

For the year:
Average occupancy	55%	57%	14%	14%
Average annual rent psf	£26.31	£26.53	£18.06	£17.27

	£000	£000	£000	£000
Self storage revenue	46,763	47,206	1,417	620
Other storage related revenue⁽³⁾	8,282	7,964	462	200
Ancillary store rental revenue	89	96	1	-

Store revenue	55,134	55,266	1,880	820
Direct store operating costs (excluding depreciation)	(20,424)	(20,301)	(2,178)	(699)
Leasehold rent⁽⁴⁾	(1,962)	(2,010)	-	-

Store EBITDA⁽⁵⁾	32,748	32,955	(298)	121
EBITDA Margin⁽⁶⁾	59.4%	59.6%	(15.9%)	14.8%

Cumulative capital expenditure	£m		£m

to 31 March 2010	346.8		75.2
to complete	4.1		2.7

Total cost	350.9		77.9

(1) Stores 100% owned by the Group.

(2) Stores operating in Big Yellow Limited Partnership. The Group owns a 33.3% interest in the Partnership.

(3) Packing materials, insurance and other storage related fees.

(4) Rent for seven short and one long leasehold property within the wholly owned stores accounted for as investment properties and finance leases under IFRS with total self storage capacity of 496,000 sq ft.

(5) Earnings before interest, tax, depreciation and amortisation. The direct store operating costs include all sales and marketing costs incurred centrally and the cost of our head office customer support centre.

(6) Of the wholly owned stores, the seven short leasehold stores achieved an EBITDA of £4.4 million and EBITDA margin of 45%. The 44 freehold stores achieved an EBITDA of £28.3 million and EBITDA margin of 63%.

Consolidated income statement

Year ended 31 March 2010

	Note	2010 £000	2009 £000

Revenue	3	57,995	58,487
Cost of sales		(22,067)	(21,781)

Gross profit		35,928	36,706

Administrative expenses		(6,860)	(5,760)

Operating profit before gains and losses on property assets		29,068	30,946
Loss on the revaluation of investment properties	13a,14	(3,558)	(52,848)
Net losses on non-current assets	10	-	(11,583)
Losses on surplus land	15	(2,073)	-

Operating profit/(loss)		23,437	(33,485)
Share of profit/(loss) of associate	13e	1,320	(1,598)
Investment income	7	386	381
Finance costs - interest payable	8	(12,259)	(17,473)
- refinancing costs	8	-	(1,347)
- fair value movement of derivatives	8, 18	(2,675)	(17,967)

Profit/(loss) before taxation		10,209	(71,489)
Taxation	9	-	(1,150)

Profit/(loss) for the year (attributable to equity shareholders)	5	10,209	(72,639)


Basic earnings/(loss) per share	12	8.11p	(62.86)p

Diluted earnings/(loss) per share	12	8.03p	(62.34)p

Adjusted earnings per share are shown in Note 12.

All items in the income statement relate to continuing operations.

Consolidated balance sheet

31 March 2010

	Note	2010 £000	2009 £000
Non-current assets
Investment property	13a	761,570	735,060
Investment property under construction	13a	33,960	-
Development property	13a	-	73,618
Interests in leasehold property	13a	21,998	21,852
Plant, equipment and owner-occupied property	13b	2,833	3,095
Goodwill	13c	1,433	1,433
Investment in associate	13e	12,105	9,285

		833,899	844,343
Current assets
Surplus land	15	20,237	-
Inventories		295	338
Trade and other receivables	16	11,097	8,362
Cash and cash equivalents		30,619	3,222
Assets classified as held for sale	13d	-	3,200

		62,248	15,122

Total assets		896,147	859,465

Current liabilities
Trade and other payables	17	(19,459)	(18,413)
Obligations under finance leases	21	(1,958)	(1,984)

		(21,417)	(20,397)
Non-current liabilities
Derivative financial instruments	18	(7,980)	(5,550)
Bank borrowings	19	(297,816)	(308,672)
Obligations under finance leases	21	(20,040)	(19,868)
Other payables	17	(1,609)	(2,661)

		(327,445)	(336,751)

Total liabilities		(348,862)	(357,148)
Net assets		547,285	502,317

Equity
Called up share capital	22	13,099	11,559
Share premium account		43,384	41,663
Reserves		490,802	449,095

Equity shareholders' funds		547,285	502,317

The financial statements were approved by the Board of Directors and authorised for issue on 14 May 2010. They were signed on its behalf by:

James Gibson, Director John Trotman, Director

Company Registration No. 03625199

Consolidated statement of comprehensive income

Year ended 31 March 2010

	2010 £000	2009 £000

Current and deferred tax recognised in equity	-	(240)

Net expense recognised directly in equity for the year	-	(240)

Profit/(loss) for the year	10,209	(72,639)

Total recognised income and expense for the period attributable to equity shareholders	10,209	(72,879)

Consolidated statement of changes in equity

Year ended 31 March 2010

	Share capital £000	Share premium account £000	Capital redemption reserve £000	Retained earnings £000	Other distributable reserve £000	Own shares £000	Total £000

At 1 April 2009	11,559	41,663	1,653	449,338	-	(1,896)	502,317
Total comprehensive income for the period	-	-	-	10,209	-	-	10,209
Issue of share capital	1,540	1,721	-	-	30,373	-	33,634
Credit to equity for equity-settled share based payments	-	-	-	1,125	-	-	1,125

At 31 March 2010	13,099	43,384	1,653	460,672	30,373	(1,896)	547,285

The other distributable reserve arose from merger relief under S612 of Companies Act 2006, following the Group's placing of 11.5 million shares in the year.

Year ended 31 March 2009

	Share capital £000	Share premium account £000	Capital redemption reserve £000	Retained earnings £000	Own shares £000	Total £000

At 1 April 2008	11,551	41,645	1,653	527,933	(1,896)	580,886
Total comprehensive income for the period	-	-	-	(72,639)	-	(72,639)
Issue of share capital	8	18	-	-	-	26
Dividends	-	-	-	(6,309)	-	(6,309)
Credit to equity for equity-settled share based payments	-	-	-	593	-	593
Deferred tax on share-based payment transactions	-	-	-	(240)	-	(240)

At 31 March 2009	11,559	41,663	1,653	449,338	(1,896)	502,317

Consolidated cash flow statement

Year ended 31 March 2010

	Note	2010 £000	2009 £000
Operating profit/(loss)		23,437	(33,485)
Loss on the revaluation of investment properties	13a, 14	3,558	52,848
Loss on non-current assets	10	-	11,583
Losses on surplus land	15	2,073	-
Depreciation	13b	631	729
Depreciation of finance lease capital obligations	13a	815	690
Employee share options	6	1,664	593
Decrease/(increase) in inventories		43	(7)
Increase in receivables		(1,233)	(1,013)
Increase in payables		283	136

Cash generated from operations		31,271	32,074

Interest paid		(12,292)	(38,606)
Interest received		84	496
REIT conversion charge		-	(90)

Cash flows from operating activities		19,063	(6,126)

Investing activities

Sale of non-current assets		-	3,825
Sale of land held for resale		1,927	-
Purchase of non-current assets		(13,213)	(33,863)
Additions to surplus land		(360)	-
Sale of assets to associate		-	22,778
Investment in associate	13e	(1,500)	(5,429)

Cash flows from investing activities		(13,146)	(12,689)

Financing activities
Issue of share capital		33,634	26
Payment of finance lease liabilities	13a	(815)	(690)
Equity dividends paid	11	-	(6,309)
Increase in borrowings - RBS facility		-	7,000
Repayment of RBS facility		-	(291,000)
(Reduction)/increase in borrowings - HSH facility		(11,339)	311,339

Cash flows from financing activities		21,480	20,366

Net increase in cash and cash equivalents		27,397	1,551

Opening cash and cash equivalents		3,222	1,671

Closing cash and cash equivalents		30,619	3,222

Reconciliation of net cash flow to movement in net debt

Year ended 31 March 2010

	Note	2010 £000	2009 £000

Net increase in cash and cash equivalents in the year		27,397	1,551
Cash outflow/(inflow) from decrease/(increase) in debt financing		11,339	(27,339)

Change in net debt resulting from cash flows		38,736	(25,788)

Movement in net debt in the year		38,736	(25,788)
Net debt at the start of the year		(308,117)	(282,329)

Net debt at the end of the year	18	269,381	(308,117)

Notes to the financial statements

Year ended 31 March 2010

1. General information

Big Yellow Group PLC is a Company incorporated in Great Britain under the Companies Act 2006. The address of the registered office is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT. The nature of the Group's operations and its principal activities are set out in note 4 and in the Business Review.

These financial statements are presented in pounds sterling because that is the currency of the economic environment in which the Group operates.

2. BASIS OF PREPARATION

The condensed set of financial statements set out above (which was approved by the Board on 14 May 2010) has been compiled in accordance with IFRS, but does not contain sufficient information to constitute a full set of IFRS financial statements. This financial information does not constitute the Company's statutory accounts for the years ended 31 March 2009 and 31 March 2010, but is derived from those accounts. Those accounts give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole. The Company's statutory accounts for the year ended 31 March 2009 have been filed with the Registrar of Companies. The Company's statutory accounts for the year ended 31 March 2010 will be filed with the Registrar of Companies following the Annual General Meeting. The auditors' reports on both the 2009 and 2010 accounts were unqualified; did not draw attention to any matters by way of emphasis; and did not contain statements under s498(2) or (3) Companies Act 2006 or preceding legislation.

The statutory accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. The Group has applied all accounting standards and interpretations issued by the International Accounting Standards Board and International Financial Reporting Interpretations Committee as endorsed by the EU relevant to its operations and effective for accounting periods beginning on 1 April 2009. The same accounting policies as applied in the Group's statutory accounts for the year ended 31 March 2009 have been applied in this condensed set of financial statements, except for changes in accounting policies resulting from the adoption of IAS 1 (revised), IAS 40 (revised) and amendments to IFRS 7.

Presentation

IAS 1 (revised) requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income. As a result, a consolidated statement of changes in equity has been included as a primary statement, showing changes in each component of equity for each period presented. In addition, the revised standard requires the presentation of a third balance sheet, where certain changes in accounting policies are applied retrospectively.

Development properties

Previously, development properties were accounted for under IAS 16, but are now accounted for under IAS 40. The Group's date of adoption was 1 April 2009. The impact of the adoption of IAS 40 (revised) was a) the reclassification of property under construction into investment property (previously held within development property), and b) the reclassification of surplus land elements into surplus land current assets (previously held within development property). In accordance with IAS 40 the prior year comparatives have not been restated to reflect this change in accounting policy. The Group's investment property under construction and surplus land accounting policies are included below.

As a result, and given this is the first time this standard has been applied by the Group, a deficit has been booked of £13.3 million against the Group assets, and a £0.2 million deficit has been included as our share in Big Yellow Limited Partnership.

IFRS 7

The amendments to IFRS 7 expand the disclosures required in respect of fair value measurements and liquidity risk. The Group has elected not to provide comparative information for this additional disclosure in the current year, in accordance with the transitional reliefs included in the amendments.

The Group's revised investment property under construction and surplus land accounting policies are shown below.

Investment property under construction

Investment property under construction is initially recognised at cost and revalued at the balance sheet date to fair value as determined by professionally qualified external valuers.

Gains or losses arising from the changes in fair value of investment property under construction are included in the income statement in the period in which they arise. In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant.

Surplus land

Surplus land is recognised at the lower of cost and net realisable value. Any gains and losses on surplus land are recognised through the income statement.

Other than as discussed above, the financial statements have been prepared using accounting policies which have been applied consistently throughout the year and the preceding year.

Going concern

A review of the Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Business and Financial Review. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance sheet, cash flow statement and accompanying notes in the financial statements. Further information concerning the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk can be found in the Business and Financial Review.

After reviewing Group cash balances, borrowing facilities and projected cash flows, the Directors believe that the Group has adequate resources to continue operations for the foreseeable future. In reaching this conclusion the Directors have had regard to the Group's operating plan and budget for the year ended 31 March 2011 and projections contained in the longer term business plan which covers the period to March 2016. The Directors have considered carefully the Group's trading performance and cash flows as a result of the uncertain global economic environment, the ongoing shortage of credit available in the bank finance market in particular and the other principal risks to the Group's performance. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

3. Revenue

Analysis of the Group's operating revenue can be found below and in the Portfolio Summary.

	2010 £000	2010 £000	2009 £000	2009 £000

Open stores
Self storage revenue	46,763		47,206
Other storage related revenue	8,282		7,964
Ancillary store rental revenue	89		96

		55,134		55,266
Stores under development
Non-storage income	1,232		1,636

		1,232		1,636
Fee income
Fees earned from Big Yellow Limited Partnership	1,198		1,368
Other management fees earned	406		67

		1,604		1,435
Franchise income
Franchise fees received	25		150

		25		150

Revenue per income statement		57,995		58,487

Investment income (see note 7)		386		381

Total revenue per IAS 18		58,381		58,868

Non-storage income derives principally from rental income earned from tenants of properties awaiting development.

4. Segmental Information

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 Segment Reporting) required the Group to identify two sets of segments (business and geographical), using a risks and returns approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. Given the nature of the Group's business, there remains one segment, which is the provision of self storage accommodation and related services.

Revenue represents amounts derived from the provision of self storage accommodation and related services which fall within the Group's ordinary activities after deduction of trade discounts and value added tax. The Group's net assets, revenue and profit before tax are attributable to one activity, the provision of self storage accommodation and related services. These all arise in the United Kingdom in the current year, (2009: £150,000 of income which arose in the Emirate of Dubai).

5. Profit/(LOSS) for the year

a) Profit/(loss) for the year has been arrived at after:

	2010 £000	2009 £000

Depreciation of plant, equipment and owner-occupied property	631	729
Finance lease depreciation	815	690
Decrease in fair value of investment property	3,558	52,848
Cost of inventories recognised as an expense	764	751
Employee costs (see note 6)	9,649	8,333
Operating lease rentals	80	80
Auditors' remuneration for audit services (see below)	143	142

b) Analysis of auditors' remuneration:

	2010 £000	2009 £000

Fees payable to the Company's auditors for the audit of the Company's annual accounts	136	135
Other services - audit of the Company's subsidiaries' annual accounts	7	7

Total audit fees	143	142

Tax services - compliance	43	40
Tax services - advisory	47	78
Other services - independent review of interim report	30	28

Total non-audit fees	120	146

Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on a consolidated basis.

6. Employee costs

The average monthly number of employees (including Executive Directors) was:

	2010 Number	2009 Number

Sales	209	194
Administration	43	45

	252	239

At 31 March 2010 the total number of Group employees was 287 (2009: 273)
	2010 £000	2009 £000
Their aggregate remuneration comprised:
Wages and salaries	6,948	6,727
Social security costs	719	709
Other pension costs	318	304
Share-based payments	1,664	593

	9,649	8,333

7. INVESTMENT income

	2010 £000	2009 £000

Interest receivable	386	381

	386	381

8. Finance costs

	2010 £000	2009 £000

Interest on bank borrowings	11,379	18,075
Capitalised interest	(268)	(1,924)
Interest on obligations under finance leases	1,147	1,319
Other interest payable	1	3

Total interest payable	12,259	17,473

Refinancing costs	-	1,347
Change in fair value of interest rate derivatives (see below)	2,675	17,967

Total finance costs	14,934	36,787

Included within the £2,675,000 reported above for the year ended 31 March 2010 is £245,000 in respect of derivative positions that were extended in March 2010. Included within the £17,967,000 reported above for the year ended 31 March 2009, is £14,892,000 in respect of derivative positions that were closed out in March 2009.

9. TaxATION

On 15 January 2007, the Group converted to a REIT. As a result the Group no longer pays UK corporation tax on the profits and gains from qualifying rental business in the UK provided that it meets certain conditions. Non-qualifying profits and gains of the Group continue to be subject to corporation tax as normal. On entering the REIT regime a conversion charge equal to 2% of the aggregate market value of the properties associated with the qualifying rental business was paid. The Group monitors its compliance with the REIT conditions. There have been no breaches of the conditions to date.

UK current tax	2010 £000	2009 £000

Current tax:
- Current year	-	1
- Adjustment in respect of prior year	-	(146)

Deferred tax (see note 20):
- Current year	-	1,091
- Adjustment in respect of prior year	-	204

	-	1,150

A reconciliation of the tax charge/(credit) is shown below:

	2010 £000	2009 £000

Profit/(loss) before tax	10,209	(71,489)

Tax charge/(credit) at 28% (2009 - 28%) thereon	2,858	(20,017)

Effects of:
Adjustment in respect of prior year	-	204
Revaluation of investment properties	996	14,798
Share of results of associate	(55)	-
Permanent differences	(972)	4,930
Profits from the tax exempt business	(4,321)	478
Losses not utilised in the year	1,318	-
Losses utilised in the year	-	(105)
Release of deferred tax	-	1,091
Land remediation relief	-	(146)
Temporary timing differences	176	(83)

Total tax charge	-	1,150

Analysis of deferred tax charge	2010 £000	2009 £000

On losses and interest rate derivatives	-	1,295

Deferred tax charge	-	1,295

10. Adjusted Profit before tax

	2010 £000	2009 £000

Profit/(loss) before tax	10,209	(71,489)

(Gain)/loss on revaluation of investment properties - wholly owned	3,558	52,848
- in associate	(2,036)	885
Change in fair value of interest rate derivatives - Group (see below)	2,675	17,967
- in associate	65	650
Losses on non-current assets	-	11,583
Losses on surplus land (including £30,000 gain in associate)	2,043	-
Refinancing costs	-	1,347

Adjusted profit before tax	16,514	13,791

Net bank and other interest	10,726	15,773
Depreciation	631	729

Adjusted EBITDA	27,871	30,293

Adjusted profit before tax which excludes gains/(losses) on revaluation of investment properties, changes in fair value of interest rate derivatives, net losses on non-current assets and surplus land, and non-recurring items of income and expenditure has been disclosed to give a clearer understanding of the Group's underlying trading performance.

The net losses on non-current assets in 2009 of £11,583,000 comprised of a provision against development property of £11,588,000 and a provision against non-current assets held for sale of £800,000, offset by an £805,000 profit on the disposal of other development assets.

11. Dividends

	2010 £000	2009 £000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 March 2009 of nil p (2008: 5.5p) per share.	-	6,309
Interim dividend for the year ended 31 March 2010 of nil p (2009: nil p) per share.	-	-

	-	6,309

Proposed final dividend for the year ended 31 March 2010 of 4p (2009: nil p) per share.	5,163	-

Subject to approval by shareholders at the Annual General Meeting to be held on 5 July 2010, the proposed final dividend of 4 pence per ordinary share will be paid on 14 July 2010 to shareholders on the Register on 11 June 2010.

There is no Property Income Dividend ("PID") payable for the current year. Included in the final dividend paid for the year ended 31 March 2008 is a PID of 0.15 pence per share.

12. Earnings/(loss) AND NET ASSETS per share

Earnings/(loss) per ordinary share	Year ended 31 March 2010			Year ended 31 March 2009
	Earnings £m	Shares million	Pence per share	(Loss)/ earnings £m	Shares million	Pence per share
Basic
Adjustments:	10.21	125.83	8.11	(72.64)	115.55	(62.86)
Dilutive share options	-	1.31	(0.08)	-	0.96	0.52

Diluted	10.21	127.14	8.03	(72.64)	116.51	(62.34)

Adjustments:
Loss on revaluation of investment properties	3.56	-	2.80	52.85	-	45.36
Change in fair value of interest rate derivatives	2.67	-	2.10	17.97	-	15.42
Loss on non-current assets	-	-	-	11.58	-	9.94
Losses on surplus land	2.07	-	1.63	-	-	-
Refinancing costs	-	-	-	1.35	-	1.16
Share of associate non-recurring (gains)/losses	(2.00)	-	(1.57)	1.54	-	1.32
Deferred tax	-	-	-	1.30	-	1.11
Tax effect of non- recurring items*	-	-	-	(0.09)	-	(0.08)

Adjusted - diluted	16.51	127.14	12.99	13.86	116.51	11.89

Adjusted - basic	16.51	125.83	13.12	13.86	115.55	11.99

* This takes into account the tax effect of the change in fair value of derivatives and the refinancing costs.

The calculation of basic earnings/(loss) is based on profit/(loss) after tax for the year. The weighted average number of shares used to calculate diluted earnings/(loss) per share has been adjusted for the conversion of share options.

Adjusted earnings per ordinary share before non-recurring items, movements on revaluation of investment properties, losses on non-current assets and surplus land, the change in fair value of interest rate swaps and associated tax, and deferred tax movements have been disclosed to give a clearer understanding of the Group's underlying trading performance.

The European Public Real Estate Association ("EPRA") has issued recommended bases for the calculation of net assets per share information and this is shown in the table below:

Analysis of net asset value	As at 31 March 2010 £000	As at 31 March 2009 £000

Basic net asset value	547,285	502,317
Exercise of share options	594	2,584
Diluted net asset value	547,879	504,901

Adjustments:
Fair value of derivatives	7,980	5,550
Fair value of derivatives - share of associate	770	705

EPRA net asset value	556,629	511,156

Basic net assets per share (pence)	424.0	437.6
Diluted net assets per share (pence)	418.3	424.3
EPRA net assets per share (pence)	425.0	429.5

EPRA net asset value (as above) (£000)	556,629	511,156
Valuation methodology assumption (see note 14) (£000)	37,127	32,660

Adjusted net asset value (£000)	593,756	543,816
Adjusted net assets per share (pence)	453.3	457.0

	No. of shares	No. of shares
Shares in issue	130,990,837	115,592,541
Own shares held	(1,905,000)	(815,000)
Basic shares in issue used for calculation	129,085,837	114,777,541
Exercise of share options	1,897,685	4,221,550
Diluted shares used for calculation	130,983,522	118,999,091

Adjustment for placing ⁽¹⁾		No. of shares
Diluted shares at 31 March 2009		118,999,091
Shares issued in placing		11,549,000
Revised shares		130,548,091

		£000
Adjusted net assets at 31 March 2009		543,816
Placing proceeds (net)		31,534
Adjusted net assets at 31 March 2009 proforma post placing		575,350

Adjusted net assets per share at 31 March 2009 proforma post placing		440.7p

⁽¹⁾ Big Yellow issued 9.9% of its share capital in May 2009, raising £31.5 million (net of expenses). A proforma adjusted net assets per share has been produced as if the placing had taken place on 31 March 2009. Applying the effects of the placing to basic net assets per share for the year ended 31 March 2009, the basic net asset value increases to £533,851,000, and basic shares in issue increases to 126,326,541, giving a basic net asset per share of 422.6p.

Net assets per share are shareholders' funds divided by the number of shares at the period end. The shares currently held in the Group's Employee Benefit Trust are excluded from both net assets and the number of shares.

Adjusted net assets per share include:

· the effect of those shares issuable under employee share option schemes; and

· the effect of alternative valuation methodology assumptions (see note 14).

13. Non-Current Assets

a) Investment property, development property and interests in leasehold property

	Investment property £000	Investment property under construction £000	Development property £000	Interests in leasehold property £000

At 31 March 2008	750,910	-	104,139	22,274
Additions	8,423	-	22,947	-
Reclassifications	28,575	-	(28,575)	-
Transfer from assets held for sale	-	-	9,432	-
Revaluation (see note 14)	(52,848)	-	-	-
Adjustment to present value	-	-	-	268
Impairment	-	-	(11,588)	-
Disposals	-	-	(475)	-
Disposal to associate	-	-	(22,262)	-
Depreciation	-	-	-	(690)

At 31 March 2009	735,060	-	73,618	21,852
Reclassification to investment property under construction	-	51,741	(51,741)	-
Reclassification to surplus land	-	-	(21,877)	-
Additions	2,368	9,919	-	-
Adjustment to present value	-	-	-	961
Transfer to investment property	14,437	(14,437)	-	-
Revaluation (see note 14)	9,705	(13,263)	-	-
Depreciation	-	-	-	(815)

At 31 March 2010	761,570	33,960	-	21,998

See note 2 for details of the reclassification to investment property under construction.

The income from self storage accommodation earned by the Group from its investment property is disclosed in note 3. Direct operating expenses arising on the investment property in the year are disclosed in the Portfolio Summary.

The total investment property balance per IAS 40 amounts to £817,528,000 (2009: £756,912,000), being the sum of investment property, investment property under construction and interests in leasehold property shown above.

b) Plant equipment and owner occupied property

	Freehold Property £000	Leasehold improvements £000	Plant and machinery £000	Fixtures, fittings & office equipment £000	Total £000
Cost
At 31 March 2008	1,858	44	607	4,613	7,122
Additions	-	-	58	577	635
Disposal to associate	-	-	(14)	(53)	(67)

At 31 March 2009	1,858	44	651	5,137	7,690
Additions	17	-	32	320	369

At 31 March 2010	1,875	44	683	5,457	8,059

Depreciation
At 31 March 2008	(90)	(32)	(276)	(3,468)	(3,866)
Charge for the year	(35)	(2)	(116)	(576)	(729)

At 31 March 2009	(125)	(34)	(392)	(4,044)	(4,595)
Charge for the year	(34)	(3)	(63)	(531)	(631)

At 31 March 2010	(159)	(37)	(455)	(4,575)	(5,226)

Net book value
At 31 March 2010	1,716	7	228	882	2,833

At 31 March 2009	1,733	10	259	1,093	3,095

c) Goodwill

Goodwill relates to the purchase of Big Yellow Self Storage Company Limited in 1999. The asset is tested bi-annually for impairment. The carrying value of £1,433,000 remains unchanged from the prior year as there is considered to be no impairment in the value of the asset.

d) Assets classified as held for sale

In the prior year the Group had land at one site with a total historic cost of £4 million, carried at £3.2 million, after a provision for impairment in the prior year of £0.8 million against the site. Land at this site was surplus to requirements and has subsequently been sold, with completion of the sale taking place in October 2009.

e) Investment in associate

The Group has a 33.3% interest in Big Yellow Limited Partnership. This interest is accounted for as an associate, using equity accounting. The Partnership commenced trading on 1 December 2007.

	31 March 2010 £000	31 March 2009 £000
At the beginning of the year	9,285	5,454
Subscription for partnership capital and advances	1,500	5,429
Share of results (see below)	1,320	(1,598)

	12,105	9,285

The Group has subscribed for cumulative partnership capital and advances of £12,632,000 to 31 March 2010 (2009: £11,132,000).

The figures below show the trading results of Big Yellow Limited Partnership, and the Group's share of the results and the net assets of the Partnership.

Big Yellow Limited Partnership	Year ended 31 March 2010 £000	Year ended 31 March 2009 £000

Income statement (100%)
Revenue	1,880	892
Cost of sales	(2,645)	(843)
Administrative expenses	(75)	(135)

Operating loss	(840)	(86)
Gain/(loss) on the revaluation of investment properties	6,109	(2,656)
Gain on the disposal of surplus land	91	-
Net interest payable	(1,204)	(103)
Fair value movement of interest rate derivatives	(196)	(1,949)

Profit/(loss) before and after tax	3,960	(4,794)

Balance sheet (100%)
Investment property	79,660	32,650
Investment property under construction	12,850	-
Development property (including land held for resale)	-	35,016
Other fixed assets	753	208
Current assets	1,398	108
Current liabilities	(1,569)	(2,189)
Derivative financial instruments	(2,310)	(2,114)
Non-current liabilities	(54,467)	(35,825)

Net assets (100%)	36,315	27,854

Group share of (33.3%)
Operating loss	(280)	(29)
Gain/(loss) on the revaluation of investment properties	2,036	(885)
Gain on the disposal of surplus land	30	-
Net interest payable	(401)	(34)
Fair value movement of interest rate derivatives	(65)	(650)

Profit/(loss) for the year	1,320	(1,598)

Associate net assets	12,105	9,285

The Partnership has in place a loan of £75 million, secured from a syndicate of banks, involving Royal Bank of Scotland plc, HSBC Bank plc and HSH Nordbank AG. The loan has a five year term and expires in 2013. £29.8 million of the £55.1 million drawn down at 31 March 2010 has been fixed to 30 June 2013 at a weighted average interest cost post margin of 5.67%. The balance of the drawn debt is currently paying one month LIBOR plus applicable margin. The weighted average interest cost post margin at 31 March 2010 of the facility was 4.2%.

The Partnership loan has a loan to value covenant, which is first tested in November 2010, and requires the gross loan to the value of the Partnership's investment property assets to be no more than 60%.

The Group has an option at 31 March 2013, and certain dates thereafter, provided certain Internal Rate of Return ("IRR") hurdles are met to acquire the assets within the Partnership or the remaining interest in the Partnership not held by the Group. The price payable is based on the market value of the Partnership's assets and liabilities, and is subject to certain promotes, dependent on the IRR achieved.

14. VALUATION OF INVESTMENT PROPERTY

	Deemed cost £000	Revaluation on deemed cost £000	Valuation £000
Freehold stores*
As at 1 April 2009	307,222	372,098	679,320
Movement in period	16,692	14,348	31,040
As at 31 March 2010	323,914	386,446	710,360

Leasehold stores
As at 1 April 2009	15,396	40,344	55,740
Movement in period	113	(4,643)	(4,530)
As at 31 March 2010	15,509	35,701	51,210

Total of open stores
As at 1 April 2009	322,618	412,442	735,060
Movement in period	16,805	9,705	26,510
As at 31 March 2010	339,423	422,147	761,570

Investment property under construction
As at 1 April 2009	-	-	-
Movement in period	47,223	(13,263)	33,960
As at 31 March 2010	47,223	(13,263)	33,960

Valuation of all investment property
As at 1 April 2009	322,618	412,442	735,060
Movement in period	64,028	(3,558)	60,470
As at 31 March 2010	386,646	408,884	795,530

* Includes one long leasehold property

The freehold and leasehold investment properties have been valued at 31 March 2010 by external valuers, Cushman & Wakefield LLP ("C&W"). The valuation has been carried out in accordance with the RICS Valuation Standards published by The Royal Institution of Chartered Surveyors ("the Red Book"). The valuation of each of the investment properties and the investment properties under construction has been prepared on the basis of Market Value as a fully equipped operational entity, having regard to trading potential.

The valuation has been provided for accounts purposes and as such, is a Regulated Purpose Valuation as defined in the Red Book. In compliance with the disclosure requirements of the Red Book, C&W have confirmed that:

· The members of the RICS who have been the signatories to the valuations provided to the Group for the same purposes as this valuation have done so since September 2004.

· C&W have been carrying out this bi-annual valuation for the same purposes as this valuation on behalf of the Group since September 2004.

· C&W do not provide other significant professional or agency services to the Group.

· In relation to the preceding financial year of C&W, the proportion of the total fees payable by the Group to the total fee income of the firm is less than 5%.

· The fee payable to C&W is a fixed amount per store, and is not contingent on the appraised value.

Market uncertainty

C&W's valuation report comments on valuation uncertainty resulting from the recent global banking crisis coupled with the economic downturn, which have caused a low number of transactions in the market for self storage property. C&W note that, although there were a number of self storage transactions in 2007, the only two significant transactions since 2007 are the sale of a 51% share in Shurgard Europe which was announced in January 2008 and completed on 31 March 2008 and the sale of the former Keepsafe portfolio by Macquarie to Alligator Self Storage which was completed in January 2010. C&W observe that in order to provide a rational opinion of value at the present time it is necessary to assume that the self storage sector will continue to perform in a way not greatly different from that being anticipated prior to the "credit crunch", however they have reflected negative sentiment in their capitalisation rates and they have reflected current trading conditions in their cash flow projections for each property. C&W state that there is therefore greater uncertainty attached to their opinion of value than would be anticipated during more active market conditions.

Valuation methodology

C&W have adopted different approaches for the valuation of the leasehold and freehold assets as follows:

Freehold and long leasehold

The valuation is based on a discounted cash flow of the net operating income over a ten year period and notional sale of the asset at the end of the tenth year.

Assumptions

A. Net operating income is based on projected revenue received less projected operating costs together with a central administration charge of 6% of the estimated annual revenue subject to a cap and a collar. The initial net operating income is calculated by estimating the net operating income in the first 12 months following the valuation date.

B. The net operating income in future years is calculated assuming straight-line absorption from day one actual occupancy to an estimated stabilised/mature occupancy level. In the valuation the assumed stabilised occupancy level for the 51 open stores (both freeholds and leaseholds) at 31 March 2010 averages 84.20% (2009: 85.04%). The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth. The average time assumed for the stores to trade at their maturity levels across the portfolio is 42 months (2009: 40 months); for the 32 same stores, the period to maturity is 37 months (2009: 34 months).

C. The capitalisation rates applied to existing and future net cash flow have been estimated by reference to underlying yields for industrial and retail warehouse property, yields for other trading property types such as student housing and hotels, bank base rates, ten year money rates, inflation and the available evidence of transactions in the sector. The valuation included in the accounts assumes rental growth in future periods. If an assumption of no rental growth is applied to the external valuation, the stabilised yield for the 51 stores pre administration expenses is 8.44% (2009: 8.55%).

D. The future net cash flow projections (including revenue growth and cost inflation) have been discounted at a rate that reflects the risk associated with each asset. The weighted average annual discount rate adopted (for both freeholds and leaseholds) is 11.35% (2009: 11.41%).

E. Purchaser's costs of 5.75% (see below) have been assumed initially and sale plus purchaser's costs totalling 6.75% are assumed on the notional sales in the tenth year in relation to the freehold stores.

Short leasehold

The same methodology has been used as for freeholds, except that no sale of the assets in the tenth year is assumed but the discounted cash flow is extended to the expiry of the lease. The average unexpired term of the Group's seven short leasehold properties is 15.8 years (March 2009: seven short leaseholds - 16.8 years).

Investment properties under construction

C&W have valued the stores in development adopting the same methodology as set out above but on the basis of the cash flow projection expected for the store at opening after allowing for the outstanding costs to take each scheme from its current state to completion and full fit out. C&W have allowed for holding costs and construction contingency, as appropriate. For the schemes where planning consent has not yet been granted, C&W have reflected the planning risk in their valuation.

Prudent lotting

C&W have assessed the value of each property individually. However, with regard to ten recently opened stores which are loss making or have low cashflow (three wholly owned and seven in the Partnership) (2009: six stores, three wholly owned and three in the Partnership) C&W have prepared their valuation on the assumption that were these properties to be brought to the market then they would be lotted or grouped for sale with other more mature assets of a similar type owned by the Company in such a manner as would most likely be adopted in the case of an actual sale of the interests valued. This lotting assumption has been made in order to alleviate the issue of negative or low short term cash flow. C&W have not assumed that the entire portfolio of properties owned by the Group would be sold as a single lot and the value for the whole portfolio in the context of a sale as a single lot may differ significantly from the aggregate of the individual values for each property in the portfolio, reflecting prudent lotting as described above.

Valuation assumption for purchaser's costs

The Group's investment property assets have been valued for the purposes of the financial statements after deducting notional purchaser's cost of 5.75% of gross value, as if they were sold directly as property assets. The valuation is an asset valuation which is entirely linked to the operating performance of the business. They would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, which would be very difficult to achieve except in a corporate structure.

This approach follows the logic of the valuation methodology in that the valuation is based on a capitalisation of the net operating income after allowing a deduction for operational cost and an allowance for central administration costs. Sale in a corporate structure would result in a reduction in the assumed Stamp Duty Land Tax but an increase in other transaction costs reflecting additional due diligence resulting in a reduced notional purchaser's cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent years were completed in a corporate structure. The Group therefore instructed C&W to carry out a Red Book valuation on the above basis, and this results in a higher property valuation at 31 March 2010 of £831,170,000 (£35,640,000 higher than the value recorded in the financial statements). The valuations in Big Yellow Limited Partnership are £4,460,000 higher than the value recorded in the financial statements, of which the Group's share is £1,487,000. The sum of these is £37,127,000 and translates to 28.3 pence per share. We have included this revised valuation in the adjusted diluted net asset calculation (see note 12).

15. SURPLUS LAND

			£000

At 1 April 2009			-
Reclassifications from development property			21,877
Additions			360
Impairment			(2,000)

At 31 March 2010			20,237

In addition to the impairment of £2,000,000 above, selling costs of £73,000 were incurred on the disposal of surplus land (previously classified as held for sale). The total income statement loss in respect of surplus land is therefore £2,073,000.

16. TRADE AND OTHER RECEIVABLES

	31 March 2010 £000	31 March 2009 £000

Trade receivables	1,796	1,546
Other receivables	1,592	154
Prepayments and accrued income	7,709	6,662

	11,097	8,362

Trade receivables are net of a bad debt provision of £29,000 (2009: £21,000). The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

The other receivables balance has increased since the prior year due to a deferred consideration of £1.2 million on the sale of surplus land at our site in Twickenham. This amount falls due in October 2010.

Trade receivables

The Group does not typically offer credit terms to its customers and hence the Group is not exposed to significant credit risk. All customers are required to pay in advance of the storage period. A late charge of 10% is applied to a customer's account if they are greater than 10 days overdue in their payment. The Group provides for receivables on a specific basis. There is a right of lien over the customers' goods, so if they have not paid within a certain time frame, we have the right to sell the items they store to recoup the debt owed by the customer. Trade receivables that are overdue are provided for based on estimated irrecoverable amounts determined by reference to past default experience.

For individual storage customers, the Group does not perform credit checks, however this is mitigated by the fact that all customers are required to pay in advance, and also to pay a deposit ranging from between 1 week's to 4 weeks' storage income. Before accepting a new business customer who wishes to use a number of the Group's stores, the Group uses an external credit rating to assess the potential customer's credit quality and defines credit limits by customer. There are no customers who represent more than 5 per cent of the total balance of trade receivables.

Included in the Group's trade receivable balance are debtors with a carrying amount of £161,000 (2009: £155,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group holds a right of lien over the customers' goods if these debts are not paid. The average age of these receivables is 36 days past due (2009: 25 days past due).

Ageing of past due but not impaired receivables

	2010 £000	2009 £000
0 - 30 days	98	108
30 - 60 days	38	30
60 + days	25	17

Total	161	155

Movement in the allowance for doubtful debts

	2010 £000	2009 £000
Balance at the beginning of the year	21	4
Amounts provided in year	29	21
Amounts written off as uncollectible	(21)	(4)

Balance at the end of the year	29	21

The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

Ageing of impaired trade receivables

	2010 £000	2009 £000
0 - 30 days	-	-
30 - 60 days	4	3
60 + days	25	18

Total	29	21

17. TRADE AND OTHER PAYABLES

	31 March 2010 £000	31 March 2009 £000
Current
Trade payables	7,425	7,460
Other payables	2,510	1,891
Accruals and deferred income	8,472	7,834
VAT repayable under Capital Goods Scheme	1,052	1,228

	19,459	18,413

Non current
VAT repayable under Capital Goods Scheme	1,609	2,661

The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. The Directors consider the carrying amount of trade and other payables and accruals and deferred income approximates fair value. See note 19 for details of VAT repayable under Capital Goods Scheme. Included within accruals and deferred income is £540,000 in respect of the Long Term Bonus Performance Plan.

The Directors estimate the fair value of the Group's VAT payable under capital goods scheme as follows:

	2010		2009
	Carrying amount £000	Estimated fair value £000	Carrying amount £000	Estimated fair value £000

VAT payable under capital goods scheme	2,661	2,490	3,889	3,578

The fair values have been calculated by discounting expected cash flows at interest rates prevailing at the year end.

18. Financial Instruments

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 19, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group's banking facilities require hedging of 70% of the funds drawn under the investment tranche of its core banking facility. The Group has complied with this during the year.

Exposure to credit, interest rate and currency risks arises in the normal course of the Group's business. Derivative financial instruments are used to manage exposure to fluctuations in interest rates, but are not employed for speculative purposes.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

A. Balance sheet management

The Group's Board reviews the capital structure on an ongoing basis. As part of this review, the Board considers the cost of capital and the risks associated with each class of capital. The Group seeks to have a conservative gearing ratio (the proportion of net debt to equity). The Board considers at each review the appropriateness of the current ratio in light of the above. The Board is currently satisfied with the Group's gearing ratio.

The gearing ratio at the year end is as follows:

	2010 £000	2009 £000

Debt	(300,000)	(311,339)
Cash and cash equivalents	30,619	3,222

Net debt	269,381	308,117
Balance sheet equity	547,285	502,317
Net debt to equity ratio	49.2%	61.3%

Debt is defined as long-term and short-term borrowings, as detailed in note 19. Equity includes all capital and reserves of the Group attributable to equity holders of the parent. Net debt is defined as gross bank borrowings less cash and cash equivalents.

B. Debt management

The Group borrows through a senior term loan, secured on its existing store portfolio. Borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. Funding is arranged in the Group and in Big Yellow Limited Partnership through banks and financial institutions with whom the Group has a strong working relationship.

C. Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring optimal hedging strategies are applied, by either positioning the balance sheet or protecting interest expense through different interest rate cycles.

The Group has two interest rate derivatives in place; £120 million fixed at 2.99% (excluding the margin on the underlying debt instrument) until September 2015 and £70 million fixed at 3.93% (excluding the margin on the underlying debt instrument) also until September 2015.

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.

The interest rate swaps settle on a monthly basis. The floating rate on the interest rate swaps is one month LIBOR. The Group will settle the difference between the fixed and floating interest rate on a net basis.

The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the income statement. The loss in the income statement for the year of these interest rate swaps was £2,430,000 (2009: loss of £3,075,000).

A further income statement charge arose in the year of £245,000 in respect of the fair value movement of derivative positions that were extended in March 2010. A further income statement charge arose in the prior year of £14,892,000 in respect of the fair value movement of derivative positions that were closed out in March 2009.

The fair value of the above derivatives at 31 March 2010 was a liability of £7,980,000 (2009: liability of £5,550,000).

D. Interest rate sensitivity analysis

In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group's earnings, without jeopardising its flexibility. Over the longer term, permanent changes in interest rates may have an impact on consolidated earnings.

At 31 March 2010, it is estimated that an increase of 0.5 percentage points in interest rates would have reduced the Group's annual profit before tax by £550,000 (2009: increased loss before tax by £606,500) and a decrease of 0.5 percentage points in interest rates would have increased the Group's annual profit before tax by £550,000 (2009: reduced loss before tax by £606,500). There would have been no effect on amounts recognised directly in equity. The sensitivity has been calculated by applying the interest rate change to the variable rate borrowings, net of interest rate swaps, at the year end. In the prior year, a 1 percentage point increase/decrease was used, however, given monthly LIBOR is currently 0.54%, the Board considered it appropriate to reduce this measure.

The Group's sensitivity to interest rates has decreased during the year, following the repayment of floating rate debt from cash resources.

E. Cash management and liquidity

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 19 is a description of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

Short term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due consideration to risk.

F. Foreign currency management

The Group does not have any foreign currency exposure.

G. Credit risk

The credit risk management policies of the Group with respect to trade receivables are discussed in note 16. The Group has no significant concentration of credit risk, with exposure spread over 30,500 customers in our stores.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

H. Financial maturity analysis

In respect of interest-bearing financial liabilities, the following table provides a maturity analysis for individual elements.

2010 Maturity
	Total £000	Less than one year £000	One to two years £000	Two to five years £000	More than five years £000

Debt
Bank loan payable at variable rate	110,000	-	-	110,000	-
Debt fixed by interest rate derivatives	190,000	-	-	190,000	-

Total	300,000	-	-	300,000	-

2009 Maturity
	Total £000	Less than one year £000	One to two years £000	Two to five years £000	More than five years £000

Debt
Bank loan payable at variable rate	121,339	-	-	121,339	-
Debt fixed by interest rate derivatives	190,000	-	-	190,000	-

Total	311,339	-	-	311,339	-

The Group's sensitivity to interest rates has reduced during the year, following the repayment of £11.3 million of floating rate debt during the year. The Board monitors closely the exposure to the floating rate element of our debt.

I. Fair values of financial instruments

The fair values of the Group's cash and short term deposits and those of other financial assets equate to their book values. Details of the Group's receivables at amortised cost are set out in note 16. The amounts are presented net of provisions for doubtful receivables and allowances for impairment are made where appropriate. Trade and other payables, including bank borrowings, are carried at amortised cost. Finance lease liabilities are included at the fair value of their minimum lease payments. Derivatives are carried at fair value.

J. Maturity analysis of financial liabilities

The contractual maturities based on market conditions and expected yield curves prevailing at the year end date are as follows:

2010	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000

From five to twenty years	-	(672)	-	25,254	24,582
From two to five years	-	355	317,387	5,995	323,737
From one to two years	1,609	3,304	10,431	1,998	17,342

Due after more than one year	1,609	2,987	327,818	33,247	365,661
Due within one year	19,459	5,039	10,431	1,998	36,927

Total	21,068	8,026	338,249	35,245	402,588

2009	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000

From five to twenty years	-	(2,099)	-	27,348	25,249
From two to five years	1,610	(1,696)	339,654	6,029	345,597
From one to two years	1,051	2,256	11,522	2,028	16,857

Due after more than one year	2,661	(1,539)	351,176	35,405	387,703
Due within one year	18,413	4,392	11,522	2,028	36,355

Total	21,074	2,853	362,698	37,433	424,058

K. Reconciliation of maturity analyses

The maturity analysis in note 18J shows non-discounted cash flows for all financial liabilities including interest payments. The table below reconciles the borrowings column in note 19 with the borrowings and interest column in the maturity analysis presented in note 18J.

2010	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000

From two to five years	300,000	15,203	2,184	317,387
From one to two years	-	10,431	-	10,431

Due after more than one year	300,000	25,634	2,184	327,818
Due within one year	-	10,431	-	10,431

Total	300,000	36,065	2,184	338,249

2009	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000

From two to five years	308,672	28,315	2,667	339,654
From one to two years	-	11,522	-	11,522

Due after more than one year	308,672	39,837	2,667	351,176
Due within one year	-	11,522	-	11,522

Total	308,672	51,359	2,667	362,698

19. BANK BORROWINGS

Secured borrowings at amortised cost	31 March 2010 £000	31 March 2009 £000

Bank borrowings	300,000	311,339
Unamortised loan arrangement costs	(2,184)	(2,667)

	297,816	308,672

The Group has a £325 million senior debt facility in place, provided by HSH Nordbank AG, Lloyds TSB Bank plc, and HSBC Bank plc. The loan is due to expire on 15 September 2013.

The facility is secured on a first charge of 51 of the Group's properties and is subject to certain covenants. The facility is divided into two tranches, Tranche A, up to a maximum of £50 million is used to finance non-stabilised properties within the Group and carries a margin of 150 bps. Tranche B is used to finance stabilised Group properties, and carries a margin of between 112.5 bps and 150 bps dependent on the Tranche B income cover. The Group is currently paying a margin of 112.5 bps on this Tranche. As the properties within Tranche A stabilise, they can be transferred to Tranche B, reducing the margin payable.

The facility's principal covenant is an income cover covenant that requires Tranche B EBITDA to be greater than 1.4 times the interest cost in Tranche B. The Group is also required to retain consolidated net assets of £250 million; and a net debt to net assets ratio of less than 1.3 to 1. There is no loan to value covenant. At 31 March 2010 all covenants were complied with as illustrated in the table below:

	Covenant	At 31 March 2010
Minimum income cover	1.4 x	3.75x
Minimum net assets	£250 million	£547.3 million
Maximum gross loan to net assets gearing	1.3:1	0.55:1

The weighted average interest rate paid on the bank borrowings during the year was 3.6% (2009: 5.9%).

The Group has £25,000,000 in undrawn committed borrowing facilities at 31 March 2010 which expire between three and four years (2009: £13,661,000 expiring between four and five years).

Interest rate profile of financial liabilities

	Total £000	Floating rate £000	Fixed rate £000	Weighted average interest rate	Period for which the rate is fixed	Weighted average period until maturity

At 31 March 2010
Gross financial liabilities	300,000	110,000	190,000	3.5%	6.0 years	4.7 years

At 31 March 2009
Gross financial liabilities	311,339	121,339	190,000	3.7%	5.5 years	5.2 years

The floating rate at 31 March 2010 was paying a margin of 1.125% above one month LIBOR, the fixed rate debt was paying a weighted average margin of 1.19%. All monetary liabilities, including short term receivables and payables are denominated in sterling. The weighted average interest rate includes the effect of the Group's interest rate derivatives.

Narrative disclosures on the Group's policy for financial instruments are included within the Business Review and note 18.

20. Deferred tax

The movement and major deferred tax items are set out below:

	Deduction for share options	Other	Total
	£000	£000	£000

At 31 March 2008	(444)	(1,091)	(1,535)
Recognised in income	-	1,091	1,091
Recognised in equity	444	-	444

	-	-	-
At 31 March 2010
Recognised in income	-	-	-
Recognised in equity	-	-	-

At 31 March 2010	-	-	-

Deferred tax assets in respect of share based payments (£0.3 million), interest rate swaps (£4.7 million), losses (£1.5 million) and capital losses (£0.3 million) in respect of the residual business have not been recognised due to uncertainty over taxable profits in the short term within the residual business. Temporary differences arising in connection with interests in associate are insignificant.

21. obligations under finance leases

	Minimum lease payments		Present value minimum of lease payments
	2010 £000	2009 £000	2010 £000	2009 £000

Amounts payable under finance leases:
Within one year	1,998	2,028	1,958	1,984
Within two to five years inclusive	7,993	8,057	6,836	6,805
Greater than five years	25,254	27,348	13,204	13,063

	35,245	37,433	21,998	21,852

Less: future finance charges	(13,247)	(15,581)

Present value of lease obligations	21,998	21,852

All lease obligations are denominated in sterling. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The carrying amount of the Group's lease obligations approximates their fair value.

22. Share capital

	Authorised		Called up, allotted and fully paid
	2010 £000	2009 £000	2010 £000	2009 £000

Ordinary shares at 10 pence each	20,000	20,000	13,099	11,559

				No.
Movement in issued share capital
Number of shares at 1 April 2008				115,514,119
Exercise of share options - Share option scheme				78,422

Number of shares at 31 March 2009				115,592,541
Share placing				11,549,000
Issue to shares to Employee Benefit Trust				1,090,000
Exercise of share options - Share option schemes				2,759,296

Number of shares at 31 March 2010				130,990,837

The Company has one class of ordinary shares which carry no right to fixed income.

At 31 March 2010 options in issue to Directors and employees were as follows:

Date option granted	Option price per ordinary share	Date first exercisable	Date on which the exercise period expires	Number of ordinary shares 2010	Number of ordinary shares 2009

5 May 2000	100p	5 May 2003	4 May 2010	-	278,400
30 November 2000	137.5p	30 November 2003	29 November 2010	2,500	2,500
1 June 2001	125.5p	1 June 2004	31 May 2011	-	165,000
4 June 2001	131.5p	4 June 2004	3 June 2011	-	521,000
8 November 2001	98p	8 November 2004	7 November 2011	33,859	122,192
15 May 2002	102p	15 May 2005	14 May 2012	20,200	511,789
16 December 2002	81.5p	16 December 2005	15 December 2012	14,830	355,301
2 July 2003	82.5p	2 July 2006	1 July 2013	23,112	100,612
11 November 2003	96p	11 November 2006	10 November 2013	13,000	16,000
27 September 2004	nil p**	27 September 2007	26 September 2014	12,500	118,000
6 June 2005	nil p**	6 June 2008	5 June 2015	106,665	438,332
21 December 2005	225p*	21 December 2008	20 June 2009	-	831
9 June 2006	nil p**	9 June 2009	8 June 2016	109,165	460,832
18 August 2006	347p*	18 August 2009	17 February 2010	-	6,407
13 July 2007	nil p**	13 July 2010	12 July 2017	495,750	495,750
30 August 2007	409p*	30 August 2010	28 February 2011	2,772	3,049
6 March 2008	310p*	6 March 2011	5 September 2011	12,195	13,371
9 July 2008	Nil p**	9 July 2011	8 July 2018	373,000	373,000
22 August 2008	249p*	22 August 2011	21 February 2012	14,873	17,440
24 February 2009	141p*	24 February 2012	23 August 2012	246,889	262,842
3 August 2009	Nil p**	3 August 2012	2 August 2019	391,700	-
23 February 2010	255p*	22 February 2013	23 August 2013	27,447	-

				1,900,457	4,262,648

* SAYE (see note 23)

** LTIP (see note 23)

Own shares

The own shares reserve represents the cost of shares in Big Yellow Group PLC purchased in the market and held by the Big Yellow Group PLC Employee Benefit. 1,905,000 shares are held in the Employee Benefit Trust (2009: 715,000) and none are held in Treasury following the transfer of 100,000 shares to the Employee Benefit Trust from Treasury during the year (2009: 100,000 shares held in Treasury).

23. Share based payments

The Company has four equity share-based payment arrangements, namely approved and unapproved share option schemes, an LTIP scheme, an Employee Share Save Scheme ("SAYE") and a Long Term Bonus Performance Plan. The Group recognised a total expense in the year related to equity-settled share-based payment transactions since 7 November 2002 of £1,664,000 (2009: £593,000).

Equity-settled share option plans

The Group granted options to employees under Approved and Unapproved Inland Revenue Share option schemes between 16 November 1999 and 11 November 2003. The Group's schemes provided for a grant price equal to the average quoted market price of the Group shares on the date of grant. The vesting period is three to ten years. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest.

Since 3 September 2004 the Group has operated an Employee Share Save Scheme ("SAYE") which allows any employee who has more than six months service to purchase shares at a 20% discount to the average quoted market price of the Group shares at the date of grant. The associated savings contracts are 3 years at which point the employee can exercise their option to purchase the shares or take the amount saved, including interest, in cash. The scheme is administered by Yorkshire Building Society.

On 27 September 2004, 6 June 2005, 9 June 2006, 13 July 2007, 9 July 2008 and 3 August 2009 the Group awarded nil-paid options to senior management under the Group's Long Term Incentive Plan ("LTIP"). The awards are conditional on the achievement of challenging performance targets. The awards granted on 27 September 2004, 6 June 2005 and 9 June 2006 vested in full.

The weighted average share price at the date of exercise for options exercised in the year was 373 pence (2009: 297 pence).

Share option scheme "ESO"	2010 No. of Options	2010 Weighted average exercise price (in £)	2009 No. of Options	2009 Weighted average exercise price (in £)

Outstanding at beginning of year	2,072,795	1.06	2,091,075	1.06
Exercised during the year	(1,965,293)	1.07	(18,280)	0.88

Outstanding at the end of the year	107,502	0.94	2,072,795	1.06

Exercisable at the end of the year	107,502	0.94	2,072,795	1.06

Options outstanding at 31 March 2010 had a weighted average contractual life of 2.4 (2009: 2.7) years.

LTIP scheme	2010 No. of Options	2009 No. of Options

Outstanding at beginning of year	1,885,914	1,559,914
Granted during the year	393,700	373,000
Forfeited during the year	(2,000)	(9,277)
Exercised during the year	(788,834)	(37,723)

Outstanding at the end of the year	1,488,780	1,885,914

Exercisable at the end of the year	228,330	556,332

The weighted average fair value of options granted during the period was £434,528 (2009: £298,813).

Options outstanding at 31 March 2010 had a weighted average contractual life of 7.3 years (2009: 7.5 years).

Employee Share Save Scheme ("SAYE").	2010 No. of Options	2010 Weighted average exercise price (in £)	2009 No of Options	2009 Weighted average exercise price (in £)

Outstanding at beginning of year	303,939	1.62	157,919	2.94
Granted during the year	27,447	2.55	387,943	1.76
Forfeited during the year	(22,042)	1.81	(219,504)	2.82
Exercised during the year	(5,169)	3.47	(22,419)	1.56

Outstanding at the end of the year	304,175	1.66	303,939	1.62

Exercisable at the end of the year	-	-	831	2.25

Options outstanding at 31 March 2010 had a weighted average contractual life of 1.6 years (2009: 2.3 years).

The inputs into the Black-Scholes model are as follows:

	ESO	LTIP	SAYE

Expected volatility	24%	34%	36%
Expected life	3 years	3 years	3 years
Risk-free rate	4.7%	4.7%	4.1%
Expected dividends	3.2%	3.9%	4.1%

Expected volatility was determined by calculating the historical volatility of the Group's share price over the year prior to grant.

Long term bonus performance plan

The Group has a joint share ownership plan in place. This is accounted for as a compound instrument, with 50% accrued as a liability as this proportion of the award may be cash settled. The balance is recognised as a credit to equity, recognising the equity settled element. The plan was set up in August 2009. Directors and senior employees have a partial interest in 1,905,000 shares with the Group's Employee Benefit Trust, which were granted during the year. The fair value of each award is £2 subject to the vesting criteria as set out in the Directors' Remuneration Report. At 31 March 2010 the weighted average contractual life was 2.4 years.

24. capital commitments

Amounts contracted but not provided in respect of the Group's properties as at 31 March 2010 were £5.0 million (2009: £6.6 million).

25. Events after the balance sheet date

There are no reportable events after the balance sheet date.

26. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Transactions with Big Yellow Limited Partnership

As described in note 13, the Group has a 33.3% interest in Big Yellow Limited Partnership ("the Partnership"), and entered into transactions with the Partnership during the year on normal commercial terms.

In the prior year the Group sold property with a book value of £22.3 million to the Partnership, for a total profit of £0.4m. In the current year the Group earned fees from the Partnership of £1,198,000 (2009: £1,368,000). At 31 March 2010, the Group was owed £140,000 by the Partnership (2009: Group was owed £14,000 by the Partnership).

No other related party transactions took place during the years ended 31 March 2010 and 31 March 2009.

Five Year Summary

	2010 £000	2009 £000	2008 £000	2007 £000	2006 £000
Results
Revenue	57,995	58,487	56,870	51,248	41,889

Operating profit before gains and losses on property assets	29,068	30,946	29,342	27,067	21,645

Profit/(loss) before taxation	10,209	(71,489)	102,618	152,837	118,547

Adjusted profit before taxation	16,514	13,791	15,006	14,233	12,601

Net assets	547,285	502,317	580,886	487,979	244,319

Adjusted earnings per share	12.99p	11.89p	11.72p	10.01p	8.86p
Declared total dividend per share	4.0p	0p	9.5p	9.0p	5.0p

Key statistics
Number of stores open*	60	54	48	43	37
Square footage occupied*	1,915,000	1,775,000	1,850,000	1,835,000	1,672,000
Number of customers*	30,500	28,500	30,500	30,100	27,800
Average number of employees during the year	252	239	218	191	178

* - includes stores operating in Big Yellow Limited Partnership

This information is provided by RNS

The company news service from the London Stock Exchange

END

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