Final Results

Big Yellow Group PLC 10 May 2005 10 May 2005 Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company") RESULTS FOR THE TWELVE MONTHS AND FOURTH QUARTER ENDED 31 MARCH 2005 Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company"), the self storage company, is pleased to announce results for the twelve months and for the fourth quarter ended 31 March 2005. 4th quarter 3rd quarter Year Year ended ended ended ended 31 Mar 05 31 Dec 04 % 31 Mar 05 31 Mar 04 % Annualised revenue £36.5m £35.0m +4% £36.5m £27.8m . +31% Turnover £9.0m £8.8m +2% £33.4m £23.8m +40% EBDAT (see note 5) £2.5m £2.3m +9% £8.5m £5.1m +67% Profit before tax £1.28m £1.07m +20% £4.1m £1.2m +242% Earnings per share 2.52p 0.66p Dividend - final 1.50p 1.05p - total 2.00p 1.05p Adjusted net assets per share (see note 21) 186p N/A Number of customers 24,600 23,600 +4% 24,600 20,400 +21% Occupied space 1,470k sq ft 1,418k sq ft +4% 1,470k sq ft 1,268k sq ft +16% • Pre-tax profit of £4.1 million (2004: £1.2 million) up 242% • Annualised revenue of £36.5 million (2004: £27.8 million) up 31% • Earnings for the year before depreciation, amortisation and tax of £8.5 million (2004: £5.1 million) up 67%, (see note 5) • Final dividend proposed of 1.50p per ordinary share (2004:1.05p) • Adjusted Net Assets per share of 186p as at 31 March 2005 (see note 21) (175p as at 30 September 2004) • 33 stores currently open with a further 11 stores committed, providing 2.7 million sq ft of self storage space when completed • The number of customers continues to increase to 24,600 (2004: 20,400 customers) up 21% • Turnover for stores open more than two years at 1 April 2004 up 18% year on year, of which 10% is yield improvement, with the balance representing occupancy growth • Packing materials, insurance and other sales were £4.1 million in the year (2004: £3.1 million) • Facility with Royal Bank of Scotland, Bank of Ireland & Barclays Bank increased to £150 million from £80 million in April 2005 Commenting on the Outlook for the year, Nicholas Vetch, Chairman of Big Yellow, said: "We believe that in the short term trading conditions will continue to be more testing than they have been in previous years as the consumer becomes more cautious in a slowing housing market. "However, we continue to believe that the Group's strong branding, focus on customer service and strength of operational management will give it resilience, but not complete immunity to any adverse market conditions. Further, the Group is well financed with strong cashflow, significant available bank facilities, underpinned by its quality store portfolio, 80% of which is owned freehold. We cautiously look forward to our busier summer period and the continued expansion of our portfolio through the opening of existing committed stores and further site acquisitions." - Ends - For further information, please contact: Big Yellow Group PLC 01276 470190 Nicholas Vetch, Chairman James Gibson, Chief Executive Weber Shandwick Square Mile 020 7067 0700 Louise Robson or Yvonne Alexander Big Yellow Group PLC Trading Summary Years since opening Greater than 2 years Between 1 and 2 Less than 1 at 1 April 2004 years year Total Number of stores 19 8 5 32 ------------------ ------------------ ---------- ---------- At 31 March 2005 Total capacity (sq ft) 1,086,000 549,000 277,000 1,912,000 Occupied space (sq ft) 929,000 412,000 129,000 1,470,000 Percentage occupied 86% 75% 47% 77% Freehold Leasehold Freehold Leasehold Freehold Total Number of stores 13 6 5 3 5 32 Total capacity (sq ft) 741,000 345,000 360,000 189,000 277,000 1,912,000 --------- --------- --------- --------- --------- --------- £'000 £'000 £'000 £'000 £'000 £'000 Annualised revenue 14,757 8,087 6,727 3,677 3,226 36,474 For the year Self storage sales 12,218 6,825 5,174 3,053 1,929 29,199 Other income(1) 1,748 851 760 436 355 4,150 Bulk storage sales - - - - 26 26 --------- --------- --------- --------- --------- --------- Total turnover 13,966 7,676 5,934 3,489 2,310 33,375 Direct store operating costs (excluding depreciation) (4,698) (3,800) (2,056) (2,106) (1,350) (14,010) --------- --------- --------- --------- --------- --------- Store EBITDA(2) 9,268 3,876 3,878 1,383 960 19,365 EBITDA margin 66% 51% 65% 40% 42% 58% Store depreciation (1,629) (794) (897) (458) (466) (4,244) --------- --------- --------- --------- --------- --------- Store EBIT(3) 7,639 3,082 2,981 925 494 15,121 --------- Administration expenses (5,436) Operating profit 9,685 Profit on sale of assets 2 Net interest (5,634) --------- Profit before tax 4,053 ========= Capital expenditure at 31 March 2005 £m £m £m £m £m £m Pre capital goods scheme 60.6 12.4 32.2 7.2 25.8 138.2 Capital goods scheme repayment (4) 4.7 1.2 4.0 0.9 2.7 13.5 To complete 0.0 0.0 0.0 0.0 1.6 1.6 --------- --------- --------- --------- --------- --------- Total cost 65.3 13.6 36.2 8.1 30.1 153.3 (1) Packing materials, insurance and other storage related fees (2) Earnings before interest, tax, depreciation and amortisation (3) Earnings before interest and tax (4) Capital goods scheme adjustment was made on 30 September 2004 at the Interim stage (see note 16) 10 May 2005 Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company") RESULTS FOR THE TWELVE MONTHS AND FOURTH QUARTER ENDED 31 MARCH 2005 The Group continued to enjoy growth over the year, despite more testing market conditions in the second half arising from reduced consumer spending and a slowing housing market. In the face of a significant reduction in housing transactions the Group's performance over the winter months was satisfactory, with the mature stores holding their occupancy levels and lease up stores making reasonable progress. Trading in the final quarter was in line with our expectations, but April has been weaker. Whilst annualised revenue advanced in April, occupancy was flat, which we attribute to this more cautious consumer environment. Financial Results Turnover for the year was £33.4 million (2004: £23.8 million) an increase of 40%. Underlying revenue on an annualised basis increased at the year end to £36.5 million (2004: £27.8 million), up 31% compared to the previous year. The Group made a pre-tax profit for the year of £4.1 million compared with a profit of £1.2 million in 2004. Basic earnings per share were 2.52p (2004: 0.66p). Packing materials, insurance and other sales were £4.1 million, representing 14.2% of storage income (March 2004: £3.1 million, 15.0%), and at the year end the number of customers had risen to 24,600 from 20,400 at 31 March 2004, an increase of 21%. The Group continues to increase its cash generation, making an operating cash surplus of £8.5 million after operating costs, central overhead and interest costs but before depreciation, amortisation and tax (2004: £5.1 million (see note 5)). Annualised revenue over the fourth quarter rose by 4% to £36.5 million from £35.0 million at the end of the third quarter to the 31 December 2004. Turnover for the fourth quarter rose to £9.0 million from £8.8 million in the third quarter. Pre-tax profit for the fourth quarter was £1.28 million, up from £1.07 million in the third quarter. Dividend The Board has reviewed its dividend policy and concluded that in addition to the maiden interim dividend of 0.5p, the final dividend be increased, reflecting confidence in the Group's cashflow. The Board is therefore recommending a final dividend of 1.5p per ordinary share (2004: 1.05p), which together with the interim dividend of 0.5p (2004: nil), takes the total dividend for the year to 2.0p (2004: 1.05p). The ex-dividend date will be 1 June 2005; the record date 3 June 2005; with an intended payment date of 1 July 2005. Placing In February 2005, 28.15 million shares controlled or managed by Pramerica Real Estate Investors were successfully placed into the market, spread across some 44 investors, many of whom were new to the Company. This has doubled the free float and significantly enhanced liquidity in the Company's shares, a benefit to all shareholders and the Company. I would like to thank Pramerica Real Estate Investors and, in particular, Jonathan Short and his colleagues for their support and guidance since the original pre-flotation investment in September 1999. I am also delighted that Jonathan Short has agreed to remain on the Board as a Non-Executive director. Stores and the Market In the year we increased occupancy by 202,000 sq ft, with total occupancy at 31 March 2005 of 1.47 million sq ft representing a 77% occupancy rate across all trading stores. Occupancy levels on those stores that have been open for more than two years have held steady at 86% over the winter period. We have included as usual a table summarising the trading performance of all our stores over the year. The 19 stores open for more than two years made trading profits before interest, tax, depreciation and amortisation ("EBITDA") of £13.1 million in the year on turnover of £21.6 million, giving a total EBITDA margin of 61% (2004: 57%). This comprises 66% for freeholds (2004: 66%) and 51% for leaseholds (2004: 49%). Same store turnover for these 19 stores increased 18% year on year, of which 10% is a result of yield improvement and the balance occupancy growth. Recently, the self storage market in the UK has witnessed some consolidation with the merging of two of our competitors. The supply of new stores in our core area remains limited due to the relatively high barriers of site acquisition and the difficulty of obtaining planning permission. Demand for self storage appears to be more muted than in previous years, a reaction we believe to be the result of a slowing housing market and a more cautious consumer. Management Management throughout the Group has remained stable during the year both at Head Office and within the Stores. As with all businesses like ours very little can be achieved without the goodwill and hard work of the people involved and I should like therefore to express my continued thanks for all their endeavours which I believe provides the Group with such a strong competitive edge. Property We now have 44 stores open or committed having acquired six sites in the year including five freeholds at Fulham, Gloucester, South Bristol, Tunbridge Wells, Leeds and a long leasehold site in Central Bristol. 33 stores are trading, with Beckenham having opened since the year end. The proposed Fulham store, subject to Planning approval, is expected to provide in excess of 125,000 sq ft of net lettable storage space, equivalent to two standard stores. Of the 11 committed but unopened stores we have planning permissions on five and are negotiating for planning permission on the remainder. When fully developed, these stores will provide an additional 700,000 sq ft of net lettable self storage, taking the total for all stores to 2.7 million sq ft. Of the 44 stores or sites, 24 are located in Greater London with net lettable capacity of 1.6 million sq ft (59%). The property strategy remains to acquire six to eight sites per year for the foreseeable future. As indicated at the interim results we intend to expand into certain key towns in the Midlands and the North and to that end we are seeking suitable properties in those areas. We are pleased to have acquired our first store in Leeds, which is due to open in the early summer of this year. Although we have succeeded in acquiring 13 development sites in the last two years, the acquisition of high profile, quality sites, which meet our criteria and obtaining Planning Consents remains challenging and the key barrier to growth. We are primarily focussed on acquiring freehold properties in all but very exceptional circumstances and, when they come available, acquiring the freehold of our leasehold stores. Indeed, in October 2004 we completed the acquisition of the freehold investment building, part occupied by our Wandsworth store. The Group now owns 34 of its stores and sites freehold, one long leasehold and 9 short leasehold. During the year, the Group sold surplus land at three of its stores for £7.35 million at pro-rata book value which has been recycled into funding capital expenditure. Valuation and Net Asset Value Following the transfer to the Real Estate sector and first valuation disclosed in our Interim statement, we have commissioned a further valuation of the Group's property at 31 March 2005 (see Note 22). The total value of the group's properties is £314.2 million comprising £223.8 million (71%) for freehold trading stores £51.5 million (17%) for leasehold trading stores and £38.9 million (12%) for sites held for development. The properties held for development have not been valued and have been included at cost. The valuation translates into an adjusted net asset value per share of 186p after the dilutive effect of outstanding share options. In future years an external valuation will be carried out every six months using the same valuation model. The Group has not changed its accounting policy, and assets are held at historical cost less depreciation. Outlook We believe that in the short term trading conditions will continue to be more testing than they have been in previous years as the consumer becomes more cautious in a slowing housing market. However, we continue to believe that the Group's strong branding, focus on customer service and strength of operational management will give it resilience, but not complete immunity to any adverse market conditions. Further, the Group is well financed with strong cashflow, significant available bank facilities, underpinned by its quality store portfolio, 80% of which is owned freehold. We cautiously look forward to our busier summer period and the continued expansion of our portfolio through the opening of existing committed stores and further site acquisitions. Nicholas Vetch Chairman 9 May 2005 OPERATING REVIEW Stores During the year, we opened stores in Swindon, Watford and Tolworth and after the year end, Beckenham, bringing the number of stores now trading to 33. These provide a total 2.0 million sq ft of net lettable space. 30 of the stores are now trading profitably at the pre-tax level and all but the two most recently opened stores have positive operating cashflow. The maturity profile across the stores open at the end of the year is set out in the trading summary and shows a blended occupancy for the portfolio of 77% (1.47 million sq ft), with the 19 stores more than two years old at an average occupancy of 86%. There are a further 11 stores in the pipeline which, when fully developed, will increase the total capacity of the portfolio to 2.7 million sq ft. Customer move-ins per store averaged 97 per month over the year, down slightly from the 100 per month last year, reflecting a more mature store portfolio and a more difficult trading environment in the second half of the year. The continued drive to improve store operating standards and consistency across the portfolio remains a key focus for the Group. During the year our development of store managers has included increasing their ownership and accountability. There has been additional effort devoted to selling standards and customer service and this has been backed up by more streamlined and effective mystery shop and ex-customer surveys managed from head office. This has been the first year of running a revised bonus scheme for all the store management team with quarterly targets based on profit rather than revenue. We implemented this in the quarter to June to reflect the increasing proportion of mature stores in the business. The result has been an improved understanding of sales lines and control of store costs. Staff have found the build up of performance and bonus more visible with monthly reporting, and bonus payouts have been less seasonal, which was one of the key objectives. The Company manages the construction and fit-out of its stores in-house as we believe it provides better control and we have an excellent record of building stores on time and within budget. We continue to review our specifications and building methods to comply with building regulations and operational demands. Some of our earlier stores are now over five years old and to maintain the quality of our estate and customer offering we continue to invest in a rolling programme of store makeovers, preventative maintenance, store cleaning and the repair and replacement of essential equipment. In January 2005 the Company became regulated by the FSA and authorised to sell customer insurance under new legislation. This decision was taken after consultation with the UK Self Storage Association who had discussions with the Treasury and FSA, and after taking our own legal advice. It also signed a new Binding Agreement with its Lloyd's Underwriter. We have reviewed all our selling procedures and, where necessary, revised our storage agreement and insurance agreement with notification of changes to all customers. Security 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 our stores out of hours. We have implemented security procedures in relation to customers in line with advice from the Metropolitan Police. We continue to work with the regulatory authorities on issues of security and review our operational procedures regularly. The importance of security and the need for vigilance is communicated to all store staff and reinforced through regular training. Marketing During the year the Company spent approximately £1.35 million, 4% of turnover, on above the line marketing, in line with the previous year. We ran a successful TV campaign on Carlton/London Weekend Television and a radio campaign on Heart FM and selected local radio stations. Both campaigns were run over our peak trading period last summer and followed by further radio campaigns in the autumn. This was our second year of significant TV and radio investment which we believe has contributed to the achievement of Big Yellow as the leading brand in our area of operation. To build on this success and reinforce Big Yellow's brand position we have recently launched a further TV and radio advertising campaign, timed to coincide with our busier summer trading period and with a focus on Greater London and surrounding towns, benefiting 24 of our stores. Local marketing, selling standards and customer service at store level are also critical to building the brand and achieving store performance. This effort at the stores along with our central marketing initiatives is now focused on the lease up on stores between one and two years old with current occupancies of 60% and over. People At Big Yellow we aim to provide a lively, fun and enjoyable work environment, without losing the commitment to customer service and standards of performance. As the business has grown it has been necessary to formalise the means by which ideas and policy changes are communicated and discussed with employees. There are regular consultation meetings held with employees, both formally and informally, with directors and senior management spending significant time in the stores and being accessible to employees at all levels. We encourage a partnership culture within the business and believe in staff participating in corporate performance through share incentives. Many employees have benefited or continue to benefit from share options granted in previous years. In August 2004 we introduced a new Sharesave Scheme which provides an opportunity to invest in the future success of Big Yellow linked over a three year savings period. In addition, a new stakeholder pension scheme managed by Friends Provident was put in place last summer to provide more effective pension provision within the Group, as we are committed to encouraging our employees to save for their future. Currently over 60% of our employees are members of the scheme. We had 166 employees in the business at 31 March, and recruiting and retaining the right calibre people remains critical to the continued success of Big Yellow. We promote the individual development of staff through training and regular performance appraisals and have a policy on flexible working to meet individual needs where possible, without compromising corporate objectives. Systems From day one the Board has always considered investment in the development of IT systems as critical to achieving the Group's strategic and operational goals. This process has continued in the last year with further development of our centralised operating system. This is the first centralised off the shelf package available from a UK supplier capable of managing a large portfolio and was rolled out into our stores in 2003/2004. In the last year we have successfully achieved efficiencies in day to day operations and improved the quality of management information and hence financial and operational controls. An example of the efficiency gains has been the implementation of changes to customer letters, promotions and storage rents all of which can now be changed on the whole portfolio within a matter of hours. Furthermore the processing of the current year price increase to approximately 25,000 existing customers was achieved within a 24 hour period. Under the previous decentralised store based PC system this would have taken significantly longer. This centralisation of operating systems necessitated investment in new head office infrastructure in tandem with an updated IT disaster recovery plan. All current systems have been selected and implemented to support the projected growth of the business. FINANCIAL REVIEW Profit and Loss Account Annualised revenue, the measure of store revenue being billed (net of all discounts) at the end of the year, increased to £36.5 million, up from £27.8 million last year, an increase of 31%. Turnover for the year was £33.4 million, up 40% from the £23.8 million for 2004. Other sales, comprising the selling of packaging materials, insurance and storage related charges represented 14% of storage income for the year (2004: 15%). Although down slightly in percentage terms this was £4.1 million for the year up from £3.1 million in 2004. Within this we sold £1.8 million of packing materials (2004: £1.5 million). The Group made a pre-tax profit in the year of £4.1 million, up significantly from the £1.2 million in the prior year. The Group sold surplus land at three of its store development sites for net proceeds of £7.35 million making a net profit of £2,000 (see note 5). The basic earnings per share for the year was 2.52p (2004: earnings per share 0.66p) and the fully diluted earnings per share was 2.48p (2004: earnings per share 0.64p). The Group's cash earnings continue to grow as reflected by the increase in EBDAT for the year to £8.5 million (see note 5) from £5.1 million last year. The current year result is after payment to Directors and senior management of a four year cash bonus totalling £1.4 million, including employers National Insurance contributions. This scheme was set up to reward senior management through the early growth phase of the business and has not been renewed. Administration expenses including the cost of construction management were £5.4 million (2004: £3.6 million) for the year. The current year expense includes the Long Term bonus mentioned above of £1.4 million, including employers national insurance contributions and £0.3 million in relation to corporate costs principally related to the Group restructuring and new share incentive plans introduced in the first half. The balance is annual inflationary increases. Net interest expense for the year increased to £5.6 million up from £3.5 million in 2004 reflecting the increase in net borrowing over the period. The average cost of borrowing including margin at 31 March is set out below: 2005 2004 Average interest rate on fixed rate debt 6.5% 6.6% Average interest rate on variable rate debt 6.0% 5.8% Overall weighted average interest rate 6.3% 6.4% Depreciation and goodwill amortisation for the year increased to £4.4 million (2004: £3.8 million) in line with increased capital expenditure on new store openings. Group Restructuring On 13 September 2004 the Group announced the restructuring of its business with the transfer of trading operations into a new operating company separate from its property owning companies and the reclassification to the Real Estate sector. This restructuring was completed on 30 September and became effective on 1 October 2004. The Board was advised that as part of this restructuring the VAT election on all but one of its trading stores would automatically be dis-applied on completion of the restructuring. For those stores affected, storage charges from 1 October 2004 are now exempt from VAT. However the Group is now unable to recover VAT on the majority of its capital and operating expenditure. In addition a proportion of the VAT incurred and previously recovered on its historical capital expenditure will be repaid under the Capital Goods Scheme over a period of 10 years (see Note 16). The Board believes this action improves the Group's competitive position, sales and profitability, and provides flexibility for the future. Balance Sheet and Cash Flow The Group's property fixed assets are held in the balance sheet at historical cost net of depreciation. During the year the Company incurred capital expenditure of £42.8 million (2004: £36 million), the majority on the acquisition of sites and construction of stores. In addition, £16 million of VAT previously recovered but now repayable under the Capital Goods Scheme (see note 16) has been capitalised, of which £1.9 million was paid in February 2005. The increase in the net book value of tangible fixed assets in the year from £130.6 million to £177.8 million at 31 March 2005 is set out below: £ million 1 April 2004 130.6 Additions 42.8 Disposals (7.3) Capital Goods Scheme Adjustment 16.0 Depreciation (4.3) --------- 31 March 2005 177.8 ========= Following the reclassification to the Real Estate sector in September 2004 we commissioned a valuation of all the Group's trading stores as at 30 September and reported an adjusted net asset per share figure for the first time as part of our Interim Results. We intend to value our properties externally only on an annual basis at the year end in future, and have therefore had the portfolio of trading stores valued as at 31 March 2005. The results of this valuation are shown in note 22. These valuations have not been booked in the accounts. The properties held for development totalling £38.9 million at 31 March 2005 have not been re-valued and are held at cost (2004: £21.2 million). The historical cost net assets of the Group at 31 March 2005 were £58.7 million (2004: £58.4 million), the movement comprising a profit after tax of £2.5 million, new share issues on exercise of options £0.6 million, less dividend of £2.0 million and purchase of shares into a Employee Benefit Trust of £0.8 million. The Group had net current assets of £0.3 million at 31 March 2005 (2004: net current liabilities of £5.1 million). The Group is strongly cash generative and draws down from its longer term committed facilities as required to meet obligations. The cash inflow from operating activities for the year was £14.8 million compared with an inflow of £9.1 million in 2004, an increase of 63%. Financing and Treasury Over the years we have cultivated strong relationships with leading banks and other financial institutions. These relationships are key to the continued financing of the Group's growth, as although we will increasingly be able to fund our expansion internally from cashflow, there will continue to be a need for further bank debt in the medium term. The Group enjoys a strong financial position with interest cover in excess of 2.5 times with a relatively conservative debt structure secured principally against its freehold estate. The Group was comfortably in compliance with its bank covenants at 31 March 2005. At the end of the year, the Group had net borrowings of £102.5 million, an increase of £34.1 million over last year following £45.7 million of capital expenditure, £5.1 million of net interest paid, dividend payments of £1.5 million, net cashflows from changes in share capital of £0.2 million, offset by operating cash flow of £14.7 million, and land disposal proceeds of £3.7 million. Subsequent to the year end, the Group has increased its bank facility with the Royal Bank of Scotland, Bank of Ireland and more recently Barclays to £150 million. We are delighted to welcome Barclays to the syndicate of banks. This facility is secured on a portfolio of freehold and leasehold assets, and will increase total bank facilities to £183 million. Net debt at the end of March was £102.5 million, and this will leave significant available facilities to fund expansion together with the Group's growing operational cashflow. Treasury continues to be closely monitored and its policy approved by the Board. We maintain a close 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. At 31 March 2005, the Group had total borrowings of £109 million of which £53 million is fixed at maturities expiring in 2007 and 2010. We will continue to review policy in relation to future interest rate exposure based on assessment of prevailing market conditions. The Group has entered into a number of swaps to fix the interest payable on a proportion of the external borrowings. Bank loans totalling £52.9 million are fixed or are subject to interest rate swaps which expire between 2007 and 2010. Cash deposits are only placed with approved financial institutions in accordance with Group policy. Share capital The share capital of the Company totalled £10.1 million at 31 March 2005 (2004: £9.9 million), consisting of 100,725,537 ordinary shares of 10p each (2004: 99,400,216 shares). During the year the Group purchased 615,000 shares into Treasury at an average price of 132p, which were subsequently transferred into an Employee Benefit Trust ("EBT"). These shares are shown as a debit in reserves and are not included in calculating earnings and net asset value per share. Shares issued for the exercise of options during the period amounted to 1,325,321 at an average exercise price of 43p. 2005 2004 Opening shares 99,400,216 99,400,616 Buy-backs in the market for cancellation - (150,000) Shares issued for the exercise of options 1,325,321 149,600 ----------- ----------- Closing shares in issue 100,725,537 99,400,216 Shares held in EBT (615,000) - ----------- ----------- Closing shares for NAV purposes 100,110,537 99,400,216 =========== =========== 67,465,613 million shares were traded in the market during the year ended 31 March 2005 (2004:22,700,673). The average mid market price of shares traded during the year was 161p with a high of 217p and a low of 122p. At 31 March 2005 there were 7,804,295 shares subject to share option awards to employees of the Group at an average strike price of 91p. Dividend A final dividend of 1.5p per share is proposed, increased from the 1.05p final dividend for 2004 and together with the interim dividend of 0.5p (2004: Nil) takes the total dividend for the year to 2.0p (2004: 1.05p). Taxation The current year tax charge for the Group of £1.5 million (2004: £0.6 million) relates to a movement in deferred tax of £1.5 million and corporation tax payable of £0.03 million. The deferred tax asset brought forward of £1.2 million, which arose principally as a result of historic trading losses, has been fully reversed in the current year, and has been replaced by a deferred tax liability of £0.3 million. The Group has an effective tax rate for the year of 38% reduced from 47.6% in 2004. This effective tax rate is higher than 30% because the Group does not receive full tax relief for the cost of acquiring or redeveloping its property fixed assets, primarily in relation to its buildings which the Company depreciates. As a result, a significant proportion of the capital expenditure of the Group's property fixed assets does not create a deductible expense for tax purposes. As the Group grows and if the level of profits increases we would expect to see a further reduction in the effective tax rate. However the effective tax rate will always continue to be higher than the standard corporation tax rate whilst the Group continues to depreciate its property fixed assets and a proportion of its capital expenditure on property fixed assets, primarily in relation to buildings, continues to not qualify for tax relief (see note 8). International Financial Reporting Standards ("IFRS") The first full financial statements that the Group will report under IFRS will be for the year ended 31 March 2006. Our Interim results for the period to 30 September 2005 will be presented under IFRS. The move to IFRS will not change the underlying performance and cashflow of the business but will impact the way in which results are presented. Based on our review to date, we consider that the changes that will most affect Big Yellow are as follows: •We believe that all our operating leases will remain as operating leases under IFRS. •Awards made under our share option and long term incentive plans since 7 November 2002 will be fair valued. •The goodwill in our balance sheet will not be subject to amortisation, but instead will be subject to an annual impairment review. •The 2005 final dividend will not be included in the closing balance sheet, but accounted for on a cash basis. •The swap arrangements in place fixing interest rates on part of our bank debt will be marked to market. We will present our restated results under IFRS for the year ended 31 March 2005 to the market in September 2005 prior to the announcement of our interim results. In our quarterly results for the 3 months to June 2005, announced in July, we will not present a pre-tax profit figure as we will not have completed our IFRS restatement exercise by then. - Ends - For further information, please contact: Big Yellow Group PLC 01276 470190 Nicholas Vetch, Chairman James Gibson, Chief Executive Weber Shandwick Square Mile 020 7067 0700 Louise Robson or Yvonne Alexander Big Yellow Group PLC Consolidated Profit and Loss Account Year ended 31 March 2005 Note 2005 2004 £'000 £'000 Turnover 2 33,375 23,830 Cost of sales (18,254) (15,470) -------- -------- Gross profit 15,121 8,360 Administrative expenses 4 (5,436) (3,641) -------- -------- Operating profit 4 9,685 4,719 Gains and losses on fixed assets 5 2 25 Other interest receivable and similar income 142 187 Interest payable and similar charges 6 (5,776) (3,688) -------- -------- Profit on ordinary activities before taxation 4,053 1,243 Taxation 8,18 (1,531) (592) -------- -------- Profit on ordinary activities after taxation 20 2,522 651 Dividends 9,20 (2,012) (1,044) -------- -------- Retained profit/(loss) for the financial year 510 (393) ======== ======== Basic earnings per share 10 2.52p 0.66p Diluted earnings per share 10 2.48p 0.64p ======== ======== All results derive from continuing activities. There are no recognised gains or losses other than the profit or loss for the financial period and, accordingly, no statement of total recognised gains and losses is shown. Big Yellow Group PLC Consolidated Balance Sheet 31 March 2005 Note 2005 2004 £'000 £'000 Fixed assets Intangible assets 11 1,335 1,432 Tangible assets 12 177,824 130,692 -------- -------- 179,159 132,124 -------- -------- Current assets Stocks - goods held for resale 254 288 Debtors 14 8,896 5,822 Cash at bank and in hand 6,379 756 -------- -------- 15,529 6,866 Creditors: amounts falling due within one year 15 (15,224) (12,017) -------- -------- Net current assets/(liabilities) 305 (5,151) -------- -------- Total assets less current liabilities 179,464 126,973 Creditors: amounts falling due after more than one year 16 (120,486) (68,582) Provisions for liabilities and charges 18 (299) - -------- -------- Net assets 58,679 58,391 ======== ======== Capital and reserves Called up share capital 19 10,073 9,940 Capital redemption reserve 20 1,653 1,653 Share premium account 20 2,390 1,959 Other distributable reserve 20 9,059 51,045 Own shares 20 (812) - Profit and loss account 20 (3,684) (6,206) -------- -------- Equity shareholders' funds 58,679 58,391 ======== ======== Big Yellow Group PLC Reconciliation of movements in Shareholders' Funds Year ended 31 March 2005 2005 2004 Group Company Group Company £'000 £'000 £'000 £'000 Group Profit for the financial year 2,522 34 651 7 Dividends (2,012) (2,012) (1,044) (1,044) -------- -------- -------- -------- 510 (1,978) (393) (1,037) Issue of shares (net of issue costs) 564 564 51 51 LTIP credit 26 26 - - Own shares (812) (812) - - Repurchase and cancellation of ordinary shares - - (218) (218) -------- -------- -------- -------- Net addition to/(deduction) from shareholders' funds 288 (2,200) (560) (1,204) Opening shareholders' funds 58,391 64,716 58,951 65,920 -------- -------- -------- -------- Closing shareholders' funds 58,679 62,516 58,391 64,716 ======= ======== ======== ======== Big Yellow Group PLC Consolidated Profit Cash Flow Statement Year ended 31 March 2005 2005 2004 Note £'000 £'000 £'000 £'000 Cash inflow from operating activities 25 14,787 9,107 Returns on investments and servicing of finance 26(a) (5,123) (3,346) Capital expenditure and financial investment 26(a) (41,981) (32,671) Equity dividends paid (1,545) (994) -------- -------- Cash outflow before financing (33,862) (27,904) Financing Issue of ordinary share capital (net of expenses) 26(a) 564 51 Repurchase and cancellation of ordinary shares 26(a) - (218) Own shares (812) - Increase in debt 26(a) 40,000 26,293 ------- ------- 39,752 26,126 ------- ------- Increase/(decrease) in cash in the year 26(b) 5,890 (1,778) ======= ======= Reconciliation of net cash flow to movement in net debt Year ended 31 March 2005 2005 2004 Note £'000 £'000 £'000 £'000 Increase/(decrease) in cash in the year 5,890 (1,778) Cash inflow from increase in debt financing 26(b) (40,000) (26,293) ------- ------- Change in net debt resulting from cash flows (34,110) (28,071) ------- ------- Movement in net debt in the year 26(b) (34,110) (28,071) Net debt at start of year (68,404) (40,333) ------- ------- Net debt at end of year 26 (b) (102,514) (68,404) ======= ======= Big Yellow Group PLC Company Balance Sheet 31 March 2005 Note 2005 2004 £'000 £'000 Fixed assets Tangible assets 12 399 402 Investments 13 2,029 2,029 ------- -------- 2,428 2,431 ------- -------- Current assets Debtors 14 137,666 80,151 Cash at bank and in hand 4,293 - ------- -------- 141,959 80,151 Creditors: amounts falling due within one year 15 (6,187) (1,970) ------- -------- Net current assets 135,772 78,181 ------- ------- Total assets less current liabilities 138,200 80,612 Creditors: amounts falling due after more than one year 16 (75,600) (15,896) Provisions for liabilities and charges 18 (84) - ------- -------- Net assets 62,516 64,716 ======= ======== Capital and reserves Called up share capital 19 10,073 9,940 Capital redemption reserve 20 1,653 1,653 Share premium account 20 2,390 1,959 Other distributable reserve 20 49,059 51,045 Own shares 20 (812) - Profit and loss account 20 153 119 ------- -------- Equity shareholders' funds 62,516 64,716 ======= ======== Big Yellow Group PLC Notes to the accounts Year ended 31 March 2005 The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2005 or 2004, but is derived from those accounts. Statutory accounts for 2004 have been delivered to the Registrar of Companies and those for 2005 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. 1. Accounting policies The financial statements are prepared in accordance with applicable United Kingdom accounting standards. The principal accounting policies adopted are described below. They have all been applied consistently throughout the current and preceding year. Accounting convention The financial statements are prepared under the historical cost convention. Basis of consolidation The Group accounts consolidate the accounts of Big Yellow Group PLC and all its subsidiaries at the year end using acquisition accounting principles. Goodwill Purchased goodwill is capitalised in the year in which it arises and amortised over 20 years. The Directors regard 20 years as a reasonable maximum for the estimated useful life of goodwill since it is difficult to make projections exceeding this period. Capitalised purchased goodwill in respect of subsidiaries is included within intangible fixed assets. Tangible fixed assets Tangible fixed assets are carried at historical cost less depreciation and any provision for impairment Depreciation is provided on cost in equal annual instalments over the estimated useful lives of the assets. No depreciation is provided on land and assets in the course of construction. Interest, overhead and pre-opening launch costs are not capitalised. The useful economic lives of the assets are as follows: Freehold property 50 years Mezzanine flooring and staircases 25 years Leasehold improvements Over period of the lease Plant and machinery 10 years Motor vehicles 4 years Fixtures and fittings 5 years Computer equipment 3 years Mezzanine flooring and staircases are disclosed in note 12 under freehold property or short leasehold improvements as appropriate. Investments Investments held as fixed assets are stated at cost less provision for any impairment. Stocks Stocks represent goods held for resale and are held at the lower of cost and net realisable value. Pension costs Pension costs represent contributions payable to defined contribution schemes, the assets of which are held separately from those of the Group. Current tax Current tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are not discounted. Leases Operating lease rentals are charged to income in equal annual amounts over the lease term. Loan arrangement costs Costs relating to the raising of general corporate loan facilities are amortised over the estimated life of the loan and charged to the profit and loss account as part of the interest expense. The bank loans are disclosed net of unamortised loan issue costs. Turnover Turnover represents amounts derived from the provision of services which fall within the Group's ordinary activities after deduction of trade discounts and any applicable value added tax. Storage income is recognised over the period for which the storage unit is occupied by the customer. Insurance commissions are recognised over the period to which they relate. Own shares In accordance with UITF 38 "Accounting for ESOP trusts", own shares held by the Group are shown as a deduction from shareholders' funds and included in other reserves. The cost of own shares is transferred from other reserves to the profit and loss reserve systematically over the LTIP performance period. 2. Segmental information The Group's net assets, turnover and profit before tax are attributable to one activity, the provision of self storage and related services. All the Group's net assets, turnover and profit before tax arise in the United Kingdom. 3. Information regarding employees 2005 2004 Employees £'000 £'000 Wages and salaries (including Directors) 5,731 4,285 Social security costs 642 467 Other pension costs 168 132 ------ ------ 6,541 4,884 ====== ====== The average number of employees (including Directors) employed by the Group during the year: No. No. Sales 130 112 Administration 30 28 ------ ------ 160 140 ====== ====== 4. Operating profit 2005 2004 £'000 £'000 Operating profit is stated after charging: Depreciation 4,347 3,737 Amortisation of goodwill 97 97 Auditors' remuneration - Group audit fees 110 102 - non-audit services 164 29 Operating leases - other 2,453 2,342 ====== ====== Included in Group audit fees are £11,000 (2004: £10,000) in respect of the Company. The non-audit services provided during the year were £130,000 in relation to advice on the tax implications of the Group restructuring in September 2004, and £34,000 for advice on the establishment of the LTIP and Sharesave Scheme. 5. Profit before depreciation, amortisation, tax and exceptional items ("EBDAT") 2005 2004 £'000 £'000 Profit before tax 4,053 1,243 Add back/(deduct): Exceptional items (2) (25) Depreciation 4,347 3,737 Amortisation 97 97 ====== ====== Profit before depreciation, amortisation and exceptional items 8,495 5,052 ====== ====== Exceptional items 2005 2004 £'000 £'000 Profit on disposal of fixed assets 2 675 Provision against fixed asset development site - (650) ------ ------ 2 25 ====== ====== During the year, the Group sold land held within fixed assets for £7.35 million net proceeds, giving rise to an exceptional profit of £2,000 (2004:£675,000) In 2004 the Group booked an exceptional provision of £650,000 against a development site, which was the subject of a planning appeal. Significant costs have been incurred in the planning process which is still unresolved and under negotiation. The provision has therefore been retained to reflect the net realisable value of the site. 6. Interest payable and similar charges 2005 2004 £'000 £'000 Bank loans 5,747 3,625 Bank overdraft and other borrowings 29 63 ------ ------ 5,776 3,688 ====== ====== 7. Profit of parent company As permitted by section 230 of the Companies Act 1985, the profit and loss account of the parent Company is not presented as part of these accounts. The consolidated profit for the financial year includes a profit of £34,000 (2004: profit of £7,000), which is dealt within the accounts of the parent Company. 8. Taxation 2005 2004 £'000 £'000 Current tax - UK corporation tax at 30% 32 - Deferred tax (see note 18) 1,499 592 ------ ------ Total taxation 1,531 592 ====== ====== A reconciliation of the current tax charge is shown below: 2005 2004 £'000 £'000 Profit on ordinary activities before tax 4,053 1,243 ------ ------ Tax (charge) at 30% thereon (1,216) (373) Effects of: Expenses not deductible for tax purposes (525) (551) Capital allowances in excess of depreciation 1,292 533 Utilisation of tax losses 581 511 Chargeable gains (164) (120) ------ ------ 32 - ====== ====== The Group had unrelieved tax losses at 31 March 2004 for which a deferred tax asset was recognised (see note 18). An analysis of the deferred tax charge for the year is shown below: 2005 2004 £'000 £'000 Origination and reversal of timing differences (1,873) (1,017) Adjustments in respect of prior years 374 425 ------ ------ Deferred tax charge for the year (1,499) (592) ====== ====== 9. Dividends 2005 2004 £'000 £'000 Final equity dividend proposed - 1.5p per ordinary share (2004: 1.05p) 1,512 1,044 Interim equity dividend paid 0.5p (2004: nil) 500 - ------ ------ 2,012 1,044 ====== ====== The ex-dividend date will be 1 June 2005; the record date 3 June 2005; with an intended payment date of 1 July 2005. 10. Earnings per ordinary share Basic earnings per ordinary share has been calculated on the profit for the financial year of £2,522,000 (2004: £651,000) and on the weighted average number of shares in issue during the year of 99,971,791 (2004: 99,379,569). Diluted earnings per ordinary share have been calculated after allowing for the exercise of share options which have met the required exercise conditions. The weighted average number of shares is 101,497,703 (2004: 100,973,605), and the relevant profit is £2,522,000 (2004: £651,000). 11. Intangible fixed assets Group Goodwill £'000 Cost At 1 April 2004 and 31 March 2005 1,940 -------- Amortisation At 1 April 2004 508 Charge for the year 97 -------- At 31 March 2005 605 -------- Net book value At 31 March 2005 1,335 ======== At 31 March 2004 1,432 ======== 12. Tangible fixed assets Fixtures, Short Assets fittings and Group Freehold leasehold under Plant and Motor office property improvements construction machinery vehicles equipment Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost At 1 April 2004 85,564 14,502 21,202 15,952 19 2,421 139,660 Additions 22,959 2,160 30,644 2,649 - 415 58,827 Reclassifications 6,596 (1,007) (5,589) - - - - Disposals (4) - (7,343) - - (2) (7,349) --------- --------- --------- --------- --------- --------- --------- At 31 March 2005 115,115 15,655 38,914 18,601 19 2,834 191,138 --------- --------- --------- --------- --------- --------- --------- Accumulated depreciation At 1 April 2004 (2,841) (1,721) - (3,173) (11) (1,222) (8,968) Charge for the year (1,370) (618) - (1,760) (3) (596) (4,347) Reclassifications (214) 214 - - - - - Disposals - - - - - 1 1 --------- --------- --------- --------- --------- --------- --------- At 31 March 2005 (4,425) (2,125) - (4,933) (14) (1,817) 13,314 --------- --------- --------- --------- --------- --------- --------- Net book value At 31 March 2005 110,690 13,530 38,914 13,668 5 1,017 177,824 ========= ========= ========= ========= ========= ========= ========= At 31 March 2004 82,723 12,781 21,202 12,779 8 1,199 130,692 ========= ========= ========= ========= ========= ========= ========= A net profit on disposal of fixed assets of £2,000 (2004: £25,000) arose during the year. Fixtures, fittings and Leasehold Plant and Motor office Company property machinery vehicles equipment Total £'000 £'000 £'000 £'000 £'000 Cost At 1 April 2004 37 14 14 731 796 Additions - - - 201 201 Disposals - (2) - (2) (4) -------- -------- -------- -------- -------- At 31 March 2005 37 12 14 930 993 -------- -------- -------- -------- -------- Accumulated depreciation At 1 April 2004 (7) (1) (7) (379) (394) Charge for the year (7) (2) (4) (189) (202) Disposals - - - 2 2 -------- -------- -------- -------- -------- At 31 March 2005 (14) (3) (11) (566) (594) -------- -------- -------- -------- -------- Net book value At 31 March 2005 23 9 3 364 399 ======== ======== ======== ======== ======== At 31 March 2004 30 13 7 352 402 ======== ======== ======== ======== ======== 13. Investments held as fixed assets Investment in subsidiary Company undertakings £'000 Cost At 1 April 2004 and 31 March 2005 2,029 ============= The investments relate to the 100% ownership of the ordinary share capital of the Group's subsidiaries. All of the Group's subsidiaries are incorporated in Great Britain and registered at the same address as the Company. Details of the Group's principal subsidiaries are shown below: Principal activity - provision of self storage Principal activity - construction .Big Yellow Self Storage Company Limited Big Yellow Construction Company Limited Big Yellow Self Storage Company 1 Limited Big Yellow Self Storage Company 2 Limited Big Yellow Self Storage Company 3 Limited Big Yellow Self Storage Company 4 Limited Big Yellow Self Storage Company 5 Limited Big Yellow Self Storage Company 6 Limited Big Yellow Self Storage Company 7 Limited BYSSCo Limited 14. Debtors 2005 2004 Group Company Group Company £'000 £'000 £'000 £'000 Trade debtors 756 - 357 - Amounts owed by Group undertakings - 137,655 - 80,097 Other debtors 3,986 4 587 4 Deferred tax (see note 18) - - 1,200 - Prepayments and accrued income 4,154 7 3,678 50 -------- -------- -------- -------- 8,896 137,666 5,822 80,151 ======== ======== ======== ======== 15. Creditors: amounts falling due within one year 2005 2004 Group Company Group Company £'000 £'000 £'000 £'000 Bank overdraft - - 267 267 Trade creditors 3,623 3,623 3,985 72 Taxation and social security - - 117 56 Other creditors 1,914 15 1,518 6 Corporation tax 32 - - - Proposed dividend 1,511 1,511 1,044 1,044 Accruals and deferred income 6,258 1,038 5,086 525 VAT payable under Capital Goods scheme 1,886 - - - -------- -------- -------- -------- 15,224 6,187 12,017 1,970 ======== ======== ======== ======== 16. Creditors: amounts falling due after more than one year 2005 2004 Group Company Group Company £'000 £'000 £'000 £'000 Bank loans 108,893 76,000 68,893 16,000 Unamortised loan arrangement costs (545) (400) (311) (104) VAT Payable under Capital Goods scheme 12,138 - - - -------- -------- -------- -------- 120,486 75,600 68,582 15,896 ======== ======== ======== ======== The bank loans are secured on certain of the Group's properties. Details of the maturity of the loans and the interest rates they bear are given in note 17. The Group has VAT repayable under the Capital Goods Scheme which is estimated at £14.0 million. The projected annual repayment schedule is set out below: Total £'000 Year ended 31 March 2006 1,886 Years ended 31 March 2007 to 31 March 2011 (5 years) 9,193 Years ended 31 March 2012 to 31 March 2016 (5 years) 2,945 ------ Total 14,024 ------ 17. Financial instruments The Group's only financial instruments as at 31 March 2005 are bank loans of £108,893,000 (2004: £68,893,000), cash of £6,379,000 (2004: £756,000), bank overdraft of £nil (2004: £267,000) and trade debtors and creditors, which arise directly from its operations. Other than as noted below short term debtors and creditors have been omitted from all disclosures below. The Group does not trade in financial instruments. Maturity profile of financial assets and liabilities 2005 2004 Financial Financial Financial Financial assets liabilities assets liabilities £'000 £'000 £'000 £'000 Within one year or on demand 6,379 - 756 (267) Between two and five years - 108,893 - (68,893) -------- -------- -------- -------- Gross financial liabilities 6,379 108,893 756 (69,160) ======== ======== ======== ======== The Group has £4,000,000 in undrawn borrowing facilities at 31 March 2005 which expire after two but before five years (2004: £9,000,000). In April 2005, the main facility was increased from £80 million to £150 million. Interest rate profile of financial assets and liabilities Weighted Weighted average Period for average Floating fixed which the period Total rate Fixed rate interest rate is until £'000 £'000 £'000 rate fixed maturity At 31 March 2005 Gross financial liabilities 108,893 56,000 52,893 6.3% 4.5 years 3.1 years -------- -------- -------- -------- -------- -------- At 31 March 2004 Gross financial liabilities 69,160 26,267 42,893 6.4% 4.4 years 3.2 years -------- -------- -------- -------- -------- -------- At 31 March 2005 Gross financial assets 6,379 - 6,379 4.6% 0.1 years 0.0 years -------- -------- -------- -------- -------- -------- At 31 March 2004 Gross financial assets 756 - 756 4.2% 0.6 years 0.3 years -------- -------- -------- -------- -------- -------- The floating rate at 31 March 2005 was 1.2% above LIBOR. Currency profile of financial assets and liabilities 2005 2004 £'000 £'000 Financial assets Sterling 6,370 734 Euro 9 22 ------ ------ 6,379 756 ====== ====== Financial liabilities Sterling 108,893 69,160 ======= ====== All monetary assets and liabilities, including short term debtors and creditors are denominated in sterling, other than the £9,000 Euro cash balance shown above. Fair values of financial assets and liabilities The group had a number of interest rate swaps in place at the year end. These are shown below: Loan amount Swap rate Year of expiry Fair Value £'000 £'000 16,600 5.65% 2007 (231) 10,000 4.952% 2008 12 16,293 4.76% 2009 125 10,000 5.105% 2010 (59) ------- ------ Total 52,893 (153) ======= ====== The fair values of the financial assets and liabilities are shown below: 2005 2004 Carrying Estimated Carrying Estimated amount fair value amount fair value £'000 £'000 £'000 £'000 Cash at bank, in hand, and other liquid investments 6,379 6,379 756 756 ====== ====== ====== ====== Bank overdraft - - 267 267 ====== ====== ====== ====== Bank borrowings 108,893 109,046 68,893 69,113 ====== ====== ====== ====== VAT payable under capital goods scheme 12,138 9,357 - - ====== ====== ====== ====== The fair values have been calculated by discounting expected cash flows at interest rates prevailing at the year end. Narrative disclosures on the group's policy for financial instruments is included within the Operating and Financial review. 18. Provisions for liabilities and charges Deferred taxation 2005 2004 Provided Provided Provided Provided Group Company Group Company £'000 £'000 £'000 £'000 The amounts provided in the accounts are: Capital allowances in advance of depreciation 785 84 (330) - Short term timing differences (194) - - - Less trading losses carried forward (292) - (870) - ------- ------- ------- ------- Deferred tax provision/(asset) 299 84 (1,200) - ======= ======= ======= ======= There is no unprovided deferred tax at 31 March 2005 and 31 March 2004. The movement in deferred tax from the prior year relates to the charge in the profit and loss account of £1,499,000 (2004: charge of £592,000) (see note 8). 19. Called up share capital 2005 2004 £'000 £'000 Authorised: 200,000,000 (2004: 200,000,000) ordinary shares of 10p each 20,000 20,000 ======== ======== Allotted, called up and fully paid: 100,725,537 (2004: 99,400,616) ordinary shares of 10p each 10,073 9,940 ======== ======== Movements in issued share capital during the year were as follows: No. £'000 At 1 April 2004 Ordinary shares of 10p each 99,400 9,940 Issue of new shares 1,325 133 -------- -------- At 31 March 2005 100,725 10,073 ======== ======== Details of Directors' share options will be given in the Report on Directors' Remuneration. At 31 March 2005 there were options in issue to other employees of the Group for a further 1,218,355 ordinary shares (2004: 1,432,495). Details of these options are as follows: Option price Date on which Date option per ordinary Date first the exercise Number of granted share exercisable period expires ordinary shares 16 November 1999 62.5p 16 November 2002 15 November 2009 4,600 5 May 2000 100p 5 May 2003 4 May 2010 18,400 30 November 2000 137.5p 30 November 2003 29 November 2010 22,250 1 June 2001 125.5p 1 June 2004 31 May 2011 233,500 8 November 2001 98p 8 November 2004 7 November 2011 237,725 15 May 2002 102p 15 May 2005 14 May 2012 66,900 16 December 2002 81.5p 16 December 2005 15 December 2012 165,680 2 July 2003 82.5p 2 July 2006 1 July 2013 222,650 11 November 2003 96p 11 November 2006 10 November 2013 100,650 27 September 2004 nil p* 27 September 2007 26 September 2014 146,000 Options to acquire 289,180 ordinary shares were exercised in the year and options to acquire 70,960 shares lapsed in the year. * These nil paid share options have been awarded to senior management under the LTIP scheme. 20. Statement of movements on reserves Group Capital Share Other Profit Share redemption premium distributable Own and loss capital reserve account reserves shares account Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2004 9,940 1,653 1,959 51,045 - (6,206) 58,391 Profit for the financial year - - - - - 2,522 2,522 Dividends - - - - - (2,012) (2,012) Appropriation - - - (2,012) - 2,012 - Issue of shares 133 - 431 - - - 564 LTIP - - - 26 - - 26 Treasury shares - - - - (812) - (812) --------- --------- --------- --------- --------- --------- --------- Balance at 31 March 2005 10,073 1,653 2,390 49,059 (812) (3,684) 58,679 ========= ========= ========= ========= ========= ========= ========= Company Balance at 1 April 2004 9,940 1,653 1,959 51,045 - 119 64,716 Profit for the financial year - - - - - 34 34 Dividends - - - - - (2,012) (2,012) Appropriation - - - (2,012) - 2,012 - Issue of shares 133 - 431 - - - 564 LTIP - - - 26 - - 26 Treasury shares - - - - (812) - (812) --------- --------- --------- --------- --------- --------- --------- Balance at 31 March 2005 10,073 1,653 2,390 49,059 (812) 153 62,516 ========= ========= ========= ========= ========= ========= ========= During the year Group purchased 615,000 shares into Treasury at an average price of 132p, which were subsequently transferred into an Employee Benefit Trust for no consideration. 21. Adjusted net assets per share At 31 March 2005 Net assets Number of Net assets £'000 shares per share As per the balance sheet 58,679 100,725,537 Own shares held - (615,000) ----------- ----------- ----------- 58,679 100,110,537 58.6p FRS 13 adjustment (154) - Exercise of share options 7,331 8,010,329 Revaluation uplift on freehold properties 102,373 - Revaluation uplift on leasehold properties 32,610 - ----------- ----------- ----------- Adjusted net assets per share 200,839 108,120,866 185.8p =========== =========== =========== Net assets per share are shareholders' funds divided by the number of shareholders at the year end. The shares held by the Group's employee benefits trust (own shares held) 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; • the fair value adjustment on the Group's external debt; and • the revaluation surplus that would be included in the Group's accounts, were the Group to follow the revaluation rather than historical cost model of FRS 15. Comparative data has not been provided as the Group did not carry out full valuations of the Group's property portfolio at 31 March 2004. 22. Valuations 31 March 2005 Revaluation Historical Accumulated Net book on net book cost depreciation value Valuation value Freehold trading properties 130,551 (9,164) 121,387 223,760 102,373 Leasehold trading properties 23,616 (4,755) 18,860 51,470 32,610 -------- ------- ------- ------- -------- Total 154,167 (13,919) 140,247 275,230 134,983 ======== ======== ======= ======== ======== The Group's properties have been valued at 31 March 2005 by Cushman and Wakefield, Healy and Baker ("C&W/H&B"). C&W/H&B are qualified independent professional valuers. Valuation methodology Background The USA has approximately 38,000 self storage assets trading in a highly fragmented market with the largest 5 operators accounting for only approximately 16% of market share based on net rentable square footage. The vast majority of centres are owned and managed singly or in small portfolios. These properties have a well established track record of being trading and are therefore considered as liquid property assets. Many valuations of this asset class are undertaken by appraisers in the USA and the accepted valuation approach is to value the properties having regard to trading potential, on the basis of market value/existing use. This approach is recognised in the RICS Appraisal & Valuation Standards ("the Red Book") published by The Royal Institution of Chartered Surveyors and is adopted for other categories of property that are normally bought and sold on the basis of their trading potential. Examples include hotels, bars, restaurants, marinas and petrol stations. The UK self storage sector differs from the USA in that the five larger groups control 45-50% of the market and this proportion is likely to increase. The scope for active trading of these property assets is therefore likely to be less, however there is now some evidence that there will be liquidity, with the first store of reasonable quality having recently been acquired by a competitor in West London. C&W/H&B believe that the valuation methodology adopted in the USA is the most appropriate for the UK market. Methodology C&W/H&B have adopted different methodologies for the valuation of the leasehold and freehold assets as follows: Freehold The valuation is 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 actual revenue received less actual operating costs together with a central administration charge representing 6% of the estimated annual revenue. 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 32 stores (both freeholds and leaseholds) averages 85.64%. The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth. C. Capitalisation rates of existing and future net cashflow have been estimated by reference to underlying yields for industrial and retail warehouse property, bank base rates, ten year money rates and inflation. On average, for all 32 stores, the yield (net of purchaser's costs) arising from the first year of the projected cashflow is 7.26%. This rises to 8.83% based on the projected cashflow for the first year following estimated stabilisation in respect of each property. D. The notional sale of the freeholds in the tenth year has been assumed at a weighted average yield of 8.51%. E. The future net cashflow 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 11.57%. F. Purchaser's costs of 5.75% have been assumed initially and sale and purchaser's costs totalling 7.75% are assumed on the notional sales in the tenth year in relation to the freehold stores. 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 leaseholds is 20.8 years. 23. Financial commitments 2005 2004 The Group has non-cancellable operating lease Group Company Group Company commitments payable within the next year, Land and Land and Land and Land and expiring as follows: buildings buildings buildings buildings £'000 £'000 £'000 £'000 Within one year - - - - Within two to five years 125 75 125 75 After five years 2,374 - 2,217 - ------ ------ ------ ----- 2,499 75 2,342 75 ====== ====== ====== ===== 24. Capital commitments 2005 2004 Group Company Group Company £'000 £'000 £'000 £'000 Amounts contracted but not provided in respect of the Group's properties 5,718 - 7,897 - ====== ====== ======= ===== 25. Reconciliation of operating profit to net cash inflow from operatingactivities 2005 2004 £'000 £'000 Operating profit 9,685 4,719 Depreciation 4,347 3,737 Amortisation of goodwill 97 97 Increase/(decrease) in stock 34 (36) Increase in debtors (561) (428) Increase in creditors 1,185 1,018 ------- ------- Net cash inflow from operating activities 14,787 9,107 ======== ======== 26. (a) Analysis of cash flows for headings netted in the cash flow statement 2005 2004 £'000 £'000 £'000 £'000 Returns on investments and servicing of finance Interest received 129 189 Interest paid (4,837) (3,353) Loan arrangement fees (415) (182) ------- ------- (5,123) (3,346) ======= ======= Capital expenditure and financial investment Purchase of tangible fixed assets (45,710) (35,921) Sale of tangible fixed assets 3,729 3,250 ------- ------- (41,981) (32,671) ======= ======= Financing Issue of ordinary share capital (net of expenses) 564 51 Repurchase of ordinary shares - (218) EBT shares (812) ------- (248) ------- (167) Debt due after more than one year: Loans repaid - - New loans acquired 40,000 26,293 ------- ------- 40,000 26,293 ------- ------- Net cash inflow from financing 39,752 26,126 ======= ======= (b) Analysis of net debt At At 1 April Cash 1 March 2004 flow 2005 £'000 £'000 £'000 Cash at bank and in hand 756 5,623 6,379 Bank overdraft (267) 267 - ------- ------- ------- 489 5,890 6,379 Debt due after one year (68,893) (40,000) (108,893) ------- ------- ------- Total net debt (68,404) (34,110) (102,514) ======= ======= ======== 27. Related party transactions In preparing these financial statements the directors have taken advantage of the exemptions available under paragraph 3(c) of Financial Reporting Standard 8 - Related Party Disclosures. No other related party transactions took place during the years ended 31 March 2005 and 31 March 2004. 28. Post balance sheet event On 18 April 2005, the group increased its syndicated loan facility with Royal Bank of Scotland, Bank of Ireland & Barclays Bank to £150 million from £80 million. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Big Yellow Group (BYG)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today